Required:

1.) If the store manager were paid P1.00 per pair as commission on each pair sold in excess of the breakeven point, what would be the stores net income if 50,000 pairs were sold?

2.) If sales commissions were discontinued in favor of an P81,000 increase in fixed salaries, what would be the annual breakeven point in unit sales?

3.) If the store manager were paid 1.00 per pair as commission, what would be the annual breakeven point in peso sales?

The Walk Rite Shoe Company operates a chain of rented shoe stores. The stores sell ten different styles of relatively inexpensive men's shoes with identical purchase costs and selling price. Walk Rite is trying to determine the desirability of opening another store, which would have the following expense and revenue relationships: Variable Data: Per Pair Selling price P300.00 Cost of shoes 195.00 Sales commissions 50.00 Total variable expenses P245.00 Annual fixed expenses: Rent P 60,000 Salaries 200,000 Advertising 80,000 Other fixed expenses 20,000 Total P360,000