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Problem 5-19 Basic GMP Analysis: Graphing ILO1 LO2, LO4 Lo61 Shirts Unlimited operates a chain of shirt stores that carry many styles ofshirts that are
Problem 5-19 Basic GMP Analysis: Graphing ILO1 LO2, LO4 Lo61 Shirts Unlimited operates a chain of shirt stores that carry many styles ofshirts that are all sold atthe same price. To encourage sales personnel to be aggressive in their sales efforts, the company pays a substantial sales commission on each shirtsold. Sales personnel also reoeive a small basicsalary. The following worksheet oontains cost and revenue data for Store 38. These data are typical of the company's many outiets: Per Shirt Selling price 54.00 Variable expenses: 2500 invoice cost Sales commission 34.80 Total variable expense Fixed expenses: 191.040 Advertising 00,520 Salaries 382.080 Total fixed expenses The company has asked you, asa member of its planning group, to assist some basic analysis of its stores and company policies. Required 1. Calculate the annual break-even point in dollar sales and in unit sales for Store 30. (Do not round intermediate calculations. Omitthe sign in your response.) Break-even point in unit sales Break-even pointin dollar sales 3. lf 18800 shirts are sold in a year, what would be Store 38 s net operating income or loss? (Input the amount as a positive value. Do not round intermediate calculations. Omit the sign in your response.) (Click to select) 4. The company is considering paying the store manager ofStore 38 an incentive commission of$080 per shirt (in addition to the salespersons commissions). lfthis change is made, what will be the new break- even pointin dollar sales and in unit Do not round intermediate calculations. Round your final sales? answers to 2 decimalplaces. Omit the sign in your response.) New break-even pointin sales shirts Newbreak-even point in dollar sales 5. Refer to the original data. As an alternative to (4) above, the company is considering paying the store manager a $0.80 commission on each shirt sold in excess of the break-even point this change is made. what will be the store's net operating income or loss i 23.38D shirts are sold in a year? input the amount as a positive value. Do not round intermediate calculations. Omit the sign in your response.) (Click to select) 6. Refer to the original data. The company is considering eliminating sales commissions entirely in its stores and increasing fixed salaries by $151520 annually. Hthis change is made, what will be the new break- even pointin dollar sales and in unit in Store 30? Do not round intermediate calculations. Omit sales. the sign in your response.) New break-even point in sales shirts New break-even point in dollar sales
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