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Required information Problem 5-26 (Static) CVP Applications; Break-Even Analysis; Graphing [LO5-1, LO5-2, LO5-4, LO5-5] Skip to question [The following information applies to the questions displayed

Required information

Problem 5-26 (Static) CVP Applications; Break-Even Analysis; Graphing [LO5-1, LO5-2, LO5-4, LO5-5]

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[The following information applies to the questions displayed below.]

The Fashion Shoe Company operates a chain of womens shoe shops that carry many styles of shoes that are all sold at the same price. Sales personnel in the shops are paid a sales commission on each pair of shoes sold plus a small base salary.

The following data pertains to Shop 48 and is typical of the companys many outlets:

Per Pair of Shoes
Selling price $ 30.00
Variable expenses:
Invoice cost $ 13.50
Sales commission 4.50
Total variable expenses $ 18.00

Annual
Fixed expenses:
Advertising $ 30,000
Rent 20,000
Salaries 100,000
Total fixed expenses $ 150,000

Problem 5-26 (Static) Part 6

6. Refer to the original data. The company is considering eliminating sales commissions entirely in its shops and increasing fixed salaries by $31,500 annually. If this change is made, what will be Shop 48's new break-even point in unit sales and dollar sales? (Do not round intermediate calculations.)

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