Jim Sandalwood has recently opened The Sandal Hut in Brisbane, Australia, a store that specializes in fashionable sandals. Jim has just received a degree in business and he is anxious to apply the principles he has learned to his business. In time, he hopes to open a chain of sandal shops. As a first step, he has prepared the following analysis for his new store:

Sales price per pair of sandals	$	3.20
Variable expense per pair of sandals		0.96
Contribution margin per pair of sandals	$	2.24
Fixed expense per year:
Building rental	$	30,000
Equipment depreciation		7,000
Selling		53,960
Administrative		30,000
Total fixed expense	$	120,960