Phylicia Shoes operates a chain of shoe stores. The stores sell ten different styles of shoes with identical purchase costs and selling prices. Phylicia is trying to determine the desirability of opening another store and wants your help determining the cost behavior of the company's expenses Requirement A: Identify each description's cost behavior. DESCRIPTION VARIABLE, FIXED OR MIXED COST Costs to Manufacture Each Pair of Shoes: 40% of Retail Price variable The company pays $4,000 per month in rent for their stores. fixed The company pays a $5,000 salary per month to their Store Managers plus a 4% commission (of the retail price) for each pair of shoes sold. mixed The company pays $1,200 per month to their landlord to cover the following for utilities: electric, water and waste. fixed The company pays $1,000 per month for advertising fixed The company pays $12 per hour to their Sales Associates, plus a 2% commission (of the retail price) for each pair of shoes sold. During the quarter, the sales associates worked 4,000 hours. mixed Requirement B: Using the information provided above, complete the Contribution Margin Income Statement for the period January-March assuming that the company sold 10,000 pairs of shoes at a retail price of $25. DESCRIPTION SHOW YOUR WORK AMOUNT sales 16000 x 25 = 250,000 $ 250,000 Less: 250,000 X . 40 = 100,000 - Retail price variable 250, 000 x. 04 = 16,000 - commission 250,000 *. 02 = 51000 - sales ass . comm . $ 135, 000 Costs Contribution $ 250, 000 - $135, 000= 8115,009 margin $:115, 000 Less : Rent - $4, 000 x 3 = 12,000 wages or Fixed Utilities - $ 1200 * 3 = 3, 600 sales Advertising - $1,000 x 3 : 3, 000 ass . $ 81,600 Costs S Manager Salary-$5,00 0x 3= 15,000 $ 48,000 operating $ 115, 000 - $81 , 600 = 1 33, 400 income $ 33, 400