Required information

[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		$	40.00
Variable expenses:
Invoice cost		$	16.00
Sales commission			4.00
Total variable expenses		$	20.00
			Annual
Fixed expenses:
Advertising		$	45,000
Rent			31,000
Salaries			155,000
Total fixed expenses		$	231,000

4. The company is considering paying the Shop 48 store manager an incentive commission of 80 cents per pair of shoes (in addition to the salespersons commission). If this change is made, what will be the new break-even point in unit sales and dollar sales? (Do not round intermediate calculations. Round your final answers to the nearest whole number.)

Part two of question one:

Required information

[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		$	40.00
Variable expenses:
Invoice cost		$	16.00
Sales commission			4.00
Total variable expenses		$	20.00
			Annual
Fixed expenses:
Advertising		$	45,000
Rent			31,000
Salaries			155,000
Total fixed expenses		$	231,000

5. Refer to the original data. As an alternative to (4) above, the company is considering paying the Shop 48 store manager 55 cents commission on each pair of shoes sold in excess of the break-even point. If this change is made, what will be Shop 48's net operating income (loss) if 13,550 pairs of shoes are sold? (Do not round intermediate calculations.)