Q$5)$ The Liberty shoe company operates a chain of shoe stores. The stores sell $10$ different

styles of inexpensive men's shoes with identical unit costs and selling prices. A unit is

defined as a pair of shoes. Each store has a store manager who is paid a fixed salary.

Individual salespeople receive a fixed salary and a sales commission. Liberty is trying to

determine whether to open another store, which is expected to have the following revenue

and cost relationships:

Unit variable data $($per pair of shoe$)$

Consider each sub$-$part independently:

$($a$)$ What is the annual breakeven point in $($i$)$ units sold $($ii$)$ revenues? $[2$ marks$]$

$($b$)$ If $35,000$ units are sold, what will be the store's operating income $($loss$)?/2$ marks$/$

$($c$)$ If Sales commission was discontinued for individual salespeople in favor of Rs$.$

$1,62,000$ increase in fixed salaries, what would be the annual breakeven point in $($i$)$

units sold $($ii$)$ revenues? $[2$ marks$]$

$($d$)$ Refer to the original data. If the store manager were paid Rs$.0\mathrm{.}30$ per unit sold in addition to his current fixed salary, what would be the annual breakeven point in $(1)$ units sold $($ii$)$ revenues? $12$ marks$)$

$($e$)$ Refer to the original data. If the store manager were paid Rs$.0\mathrm{.}30$ per unit sold in excess of the breakeven point, what would be store's operating income if $50,000$ units were sold? $($This Rs$.0\mathrm{.}30$ is in addition to both the commission paid to sales staff and the store manager's fixed salary.$)[2$ marks$]$

$(1)$ Suppose the target operating income is Rs$.16,80,000.$ How many units must be sold to reach the target under $($i$)$ the fixed salary plan $($ii$)$ the fixed$-$salary$-$and$-$commission plan? $15$ marks$)$