Angie Silva has recently opened The Sandal Shop in Manila, a store that specializes in

fashionable sandals. In time, she hopes to open a chain of sandal shops. As a first step, she has

gathered the following data for her new store:

Fixed expenses per year:

Required:

Suppose the store can sell $1,500$ pairs of fashionable sandals this year, create a

contribution margin income statement using the data provided.

What is the break$-$even point in number of units and sales amount? Compare the results

of the break$-$even computation and the answer for No$.1$ requirement. After computing

relevant information, discuss your analysis and observation.

Angie is planning to consider a target profit of $P90,000$ net of $20\%$ income tax. What is the

break$-$even point in number of units and sales amount to achieve the target profit? Provide

proof by preparing a contribution margin format income statement with $P90,000$ as the net

operating income after tax.

With the contribution margin format income statement from the information in No$.1,$

compute the margin of safety in percentage and the degree of operating leverage.

Assuming Angie is optimistic that the store can sell up to $2,000$ pairs of fashionable

sandals during the year. The difference of $500$ pairs of fashionable sandals from the

original estimated sale of $1,500$ fashionable sandals is equivalent to an increase of

$33\mathrm{.}33\%.$ Using the degree of operating leverage computed in No$.4$ requirement, how

much is the expected percentage increase in net operating income?