Question
Hamzas shoes company retails running shoes for thirty dollars per pair. Hamzas shoes company spends one thousand dollars a month in rent and pays two
Hamzas shoes company retails running shoes for thirty dollars per pair. Hamzas shoes company spends one thousand dollars a month in rent and pays two full -time employees to each work one hundred and sixty hours a month at rate of ten dollars per hour. The store shares a manager with a neighboring company and pays 50% of the manager's annual salary of $60,000 and provides additional compensation in the form of bonus and benefits of $12,000. The company can source their shoes from a low-cost producer and only pays them $10 each due to the manufacturing facilities residing in a low- cost geography.
Find out:
1. To break even each month, how many running shoes does Bill's Footwear need to sell?
2. Hamzas shoes company needs to earn an operating income of $5,300 per month, how many running shoes do they need to sell?
3. The store's hourly employees agreed to fifteen percent sales -commission -only pay structure, instead of their hourly pay, how many running shoes would Hamzas shoes company need to sell to earn an operating income of $5,300?
4. If Hamzas shoes company pays its employees hourly under the original pay structure but is able to pay the mall 10 % of its monthly revenue instead of monthly rent. At what sales levels would Hamzas shoes company prefer to pay a fixed amount of monthly rent, and at what sales levels would it prefer to pay 10% of its monthly revenue as rent?
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