Question
Anna Strzelczyk has recently opened The Sandal Shop in Warsaw (a store that specializes in fashionable sandals). In time, she hopes to open a
Anna Strzelczyk has recently opened The Sandal Shop in Warsaw (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: Sales price per pair of sandals Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per year: Building rental Equipment depreciation Selling Administrative Total fixed expenses Required: 50,00 $ 25,00 $ 25,00 $ 14 000,00 $ 6 500,00 $ 15 000,00 $ 19 500,00 $ 55 000,00 1. What is the break-even point in unit sales and dollar sales? (Please interpret gained result) (2 points) 2. Anna has decided that she must earn a profit of $20,000 the first year to justify her time and effort. How many pairs of sandals must be sold to attain this target profit? (2 points) 3. Anna now has two salespersons working in the storeone full time and one part time. It will cost her an additional $9,500 per year to convert the part-time position to a full-time position. Anna believes that the change would increase annual sales by $40,000. Should she convert the position? (Do not prepare an income statement.) (2 points) 4. Refer to the original data. During the first year, the store sold only 3,000 pairs of sandals and reported the following operating results:
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