Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below.] Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that

image text in transcribedimage text in transcribedimage text in transcribed

Required information [The following information applies to the questions displayed below.] Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. In time, she hopes to open a chain of sandal shops. As a first step, she has gathered the following data for her new store: $ 26 13 $ 13 Sales price per pair of sandals Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per year: Building rental Equipment depreciation Selling Administrative Total fixed expenses $ 3,900 6,500 3,900 11,700 $ 26,000 Required: . What is the break-even point in unit sales and dollar sales? (Do not round intermediate calculations.) pairs Break-even point in unit sales Break-even point in dollar sales Required information [The following information applies to the questions displayed below.) Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. In time, she hopes to open a chain of sandal shops. As a first step, she has gathered the following data for her new store: $ 26 13 $ 13 Sales price per pair of sandals Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per year: Building rental Equipment depreciation Selling Administrative Total fixed expenses $ 3,900 6,500 3,900 11,700 $ 26,000 3. Angie has decided that she must earn a profit of $19,500 the first year to justify her time and effort. How many pairs of sandals must be sold to attain this target profit? Unit sales to attain target profit pairs 5. Refer to the original data. During the first year, the store sold only 3,000 pairs of sandals and reported the following operating results: Sales (3,000 pairs) Variable expenses Contribution margin Fixed expenses Net operating income $ 78,000 39,000 39,000 26,000 $ 13,000 a. What is the store's degree of operating leverage? b. Angie is confident that with a more intense sales effort and with a more creative advertising program she can increase unit sales by 50% next year. Using the degree of operating leverage, what would be the expected percentage increase in net operating income if Angie is able to increase unit sales by 50%? a. Degree of operating leverage b. Expected percentage increase in net operating income %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

At Least Know This CPA Review 2021 Financial Accounting And Reporting

Authors: At Least Know This

1st Edition

979-8533826730

More Books

Students also viewed these Accounting questions

Question

What coaching do you currently provide for your leaders?

Answered: 1 week ago

Question

Please help me evaluate this integral. 8 2 2 v - v

Answered: 1 week ago

Question

1. Describe the types of power that effective leaders employ

Answered: 1 week ago