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Bubba's Western Wear is a western hat retailer in Lubbock, Texas. Although Bubba's carries numerous styles has approximately the same price and invoice (purchase) cost,
Bubba's Western Wear is a western hat retailer in Lubbock, Texas. Although Bubba's carries numerous styles has approximately the same price and invoice (purchase) cost, as shown in the following table. Sales personn to encourage them to be more aggressive in their sales efforts. Currently, the Lubbock economy is really hum at Bubba's has been great. The business is very competitive, however, and Bubba, the owner, has relied on h courteous staff to attract and retain customers who otherwise might go to other western wear stores. Becaus sales, Bubba is also finding the management of certain aspects of the business more difficult, such as restock and training new salespeople. $ 80.00 40.50 14.50 55.00 $ Sales price Per unit variable expenses Purchase cost Sales commissions Total per unit variable costs Total annual fixed expenses Advertising Rent Salaries Total fixed expenses $127,500 163,000 269,500 $560,000 Required: 1. Calculate the annual breakeven point, both in terms of units and in terms of sales dollars. 2. If Bubba's sells 23,000 hats, what is its before-tax income or loss? Support your answer by preparing a con statement. 3. If Bubba's sells 35,000 hats, what is its margin of safety (MOS) and MOS ratio? 4. Bubba is considering the elimination of sales commissions completely and increasing salaries by $180,625 the new breakeven point in units? What would be the before-tax income or loss if 23,000 hats are sold with th Complete this question by entering your answers in the tabs below
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