q3

10.00 polnts Teri Hall recently opened Sheer Elegance Inc., a store specializing in fashionable stockings. Hall has just completed a course in managerial accounting, and she believes that she can apply certain aspects of the course to her business. She is particularly interested in adopting the CVP approach to decision making. Thus, she has prepared the following analysis 5 10.00 4.00 Sales price per pair of stockings Variable expense per pair of stockings Contribution margin per pair of stockings Fixed expense per year: 8.00 5 48,000 12,000 120,000 80,000 Building rental Selling Administrative Total fixed expense 5240,000 Required 1. How many pairs of stockings must the store sell to break even? What does this represent in total dollar sales? Break-even in units sales Break even unit sales dollars pairs 2. Not available in Connect. 3. How many pairs of stockings must the store sell to earn a $15,000 target profit for the first year? pairs 4. Hall now has one full-time and one part-time salesperson working in the store. It will cost her an additional $20,000 per year to convert the part-time position to a full-time position. Hall believes that the change would bring in an additional $40,000 in sales each year. Should she convert the position? Use the incremental approach. Yes No