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7. WalkRite Shoes Ltd operates a chain of shoe stores that sell 10 different styles of inexpensive men's shoes with identical unit costs and selling
7. WalkRite Shoes Ltd operates a chain of shoe stores that sell 10 different styles of inexpensive men's shoes with identical unit costs and selling prices. A unit is defined as a pair of shoes. Each store has a store manager who is paid a fixed salary. Individual salespeople receive a fixed salary and a sales commission. WalkRite Shoes is considering opening another store that is expected to have the revenue and cost relationships shown here: File Home Insert Page Layout Formulas A Data B Review View Add-Ins D E 1 Unit variable data (per pair of shoes) Annual fixed costs 2 Selling price $30.00 Rent $ 60 000 3 Cost of shoes $19.50 Salaries 200 000 4 Sales commission 1.50 Advertising 80 000 5 Variable cost per unit $21.00 Other fixed costs 20 000 6 Total fixed costs $360 000 Required 1 What is the annual break-even point in: (a) units sold and (b) revenues? 2 If 35000 units are sold, what will be the store's profit (loss)? 3 If sales commissions are discontinued and fixed salaries are raised by a total of $81000, what would be the annual break-even point in: (a) units sold and (b) revenues? 4 Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $0.30 per unit sold, what would be the annual break-even point in: (a) units sold and (b) revenues? 5 Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $0.30 per unit in excess of the break-even point, what would be the store's profit if 50000 units were sold
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