Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

Anna Strzelczyk has recently opened The Sandal Shop in Warsaw (a store that specializes in fashionable sandals). In time, she hopes to open a

image text in transcribedimage text in transcribed

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:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

13th Edition

978-0697789938

More Books

Students also viewed these Accounting questions