Fashion Inc. sells 80,000 shoes per year. The selling price per shoe is $60, variable cost per shoe is $32 for materials and $8 for commission. Fixed expenses including salaries are $400,000 for the year. Sales staff receive a base salary plus commission on each sale

a) Determine the breakeven point in dollar sales and unit sales

b) Sales staff are inquiring about an increase in Commissions to $12 per shoe. If this change were implemented, then sales are expected to increase by 4%. Determine if this new incentive will increase or decrease profitability?

c) Some sales staff would prefer an increase in base salary and removing the commissions altogether. Therefore, fixed salaries will increase by $120,000 with commissions being eliminated. Given the new changes determine the new breakeven point in dollar sales and unit sales