Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

che Bubba's Western Wear is a western hat retailer in Lubbock, Texas. Although Bubba's carries numerous styles of western hats, each hat has approximately the

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
che Bubba's Western Wear is a western hat retailer in Lubbock, Texas. Although Bubba's carries numerous styles of western hats, each hat has approximately the same price and Invoice (purchase) cost, as shown in the following table Sales personnel receive a commission to encourage them to be more aggressive in their sales efforts. Currently, the Lubbock economy is really humming, and sales growth at Bubba's has been great. The business is very competitive, however, and Bubba, the owner, has relled on his knowledgeable and courteous staff to attract and retain customers who otherwise might go to other western wear stores. Because of the rapid growth in sales, Bubba is also finding the management of certain aspects of the business more difficult, such as restocking Inventory and hiring and training new salespeople. 001 5.00.00 int sales price Por unit variable expenses Purchase cont Sales commissions Total per unit variable costa Total annual fixed expenses Advertising Rent Salaries Total fixed expenses 26.50 28.50 $ 55.00 rences $ 267,500 233,000 369,250 5 369,750 Required: 1. Calculate the annual breakeven point, both in terms of units and in terms of sales dollars. 2. If Bubba's sells 36,000 hots, what is its before-tax income or loss? Support your answer by preparing a contribution income statement 3. Bubba's sells 49,000 hots, what is its margin of safety (MOS) in dollars and MOS ratio? 4. Bubba is considering the elimination of sales commissions completely and increasing salaries by $320,625 annually. What would be the new breakeven point in units? What would be the before tax income or loss if 36,000 hots are sold with the new salary plan? Required: 1. Calculate the annual breakeven point, both in terms of units and in terms of sales dollars. 2. If Bubba's sells 36,000 hats, what is its before-tax income or loss? Support your answer by preparing a contribution income statement 3. If Bubba's sells 49,000 hats, what is its margin of safety (MOS) in dollars and MOS ratio? 4. Bubba is considering the elimination of sales commissions completely and increasing salaries by $320,625 annually. What would be the new breakeven point in units? What would be the before-tax income or loss if 36,000 hats are sold with the new salary plan? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate the annual breakeven point, both in terms of units and in terms of sales dollars. (Do not round intermediate calculations.) Breakeven Point in units in sales dollars Required 2) the new breakeven point in units? What would be the before tax income or loss if 36,000 hats are sold with the new salary plan? annually. What would be Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 If Bubba's sells 36,000 hats, what is its before-tax income or loss? Support your answer by preparing a contribution income statement. Before-tax income or loss Contribution Income Statement Total fixed expenses 869,750 Required: 1. Calculate the annual breakeven point, both in terms of units and in terms of sales dollars. 2. Bubba's sells 36,000 hats, what is its before-tax income or loss? Support your answer by preparing a contribution income statement 3. If Bubba's sells 49,000 hats, what is its margin of safety (MOS) in dollars and MOS ratio? 4. Bubba is considering the elimination of sales commissions completely and increasing salaries by $320,625 annually. What would be the new breakeven point in units? What would be the before-tax income or loss if 36,000 hats are sold with the new salary plan? OK mt Complete this question by entering your answers in the tabs below. ances Required 1 Required 2 Required 3 Required 4 If Bubba's sells 49,000 hats, what is its margin of safety (MOS) in dollars and mos ratio? (Round "Mos rato answer to 1 decimal place) Margin of safety (MOS) in dollars MOS ratio Required: 1. Calculate the annual breakeven point, both in terms of units and in terms of sales dollars. 2. Bubba's sells 36,000 hats, what is its before-tax Income or loss? Support your answer by preparing a contribution income 3. If Bubba's sells 49,000 hats, what is its margin of safety (MOS) in dollars and MOS ratio? 4. Bubba is considering the elimination of sales commissions completely and increasing salaries by $320,625 annually. What would be the new breakeven point in units? What would be the before-tax income or loss If 36,000 hats are sold with the new salary plan? statement Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required A Bubba is considering the elimination of sales contrissions completely and increasing salaries by $320,625 annually. What would be the new breskeven point in units? What would be the before-tax income or loss ir 36,000 hats are sold with the new salary plan? (Do not found intermediate calculations) New breakeven point in units Before-tax income or low

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

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

Fundamentals Of Financial Accounting

Authors: Fred Phillips, Robert Libby, Patricia Libby

1st Edition

0072992573, 9780072992571

More Books

Students also viewed these Accounting questions

Question

Discuss some of the reasons for budgeting.

Answered: 1 week ago