Question
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]
Skip to question
[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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