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S View Review Help O Search Mailings References Design Layout LEARNING ACTIVITY 2 CVP, alternative cost structures. Classical Glasses operates a kiosk at the local
S View Review Help O Search Mailings References Design Layout LEARNING ACTIVITY 2 CVP, alternative cost structures. Classical Glasses operates a kiosk at the local mall, selling sunglasses for $30 each. Classical Glasses currently pays $1,000 a month to rent the space and pays two full-time employees to each work 160 hours a month at $10 per hour. The store shares a manager with a neighbouring kiosk and pays 50% of the manager's annual salary of $60,000 and benefits of $12,000. The wholesale cost of the sunglasses to the company is $10 a pair. Required 1. How many sunglasses does Classical Glasses need to sell each month to break even? 2. If Classical Glasses wants to earn an operating income of $5,300 per month, how many sunglasses does the store need to sell? 3. If the store's hourly employees agreed to a 15% sales commission-only pay structure, instead of their hourly pay, how many sunglasses would Classical Glasses need to sell to earn an operating income of $5,300? 4. Assume Classical Glasses pays its employees hourly under the original pay structure, but is able to pay the mall 10% of its monthly revenue instead of monthly rent. At what sales levels would Classical Glasses prefer to pay a fixed amount of monthly rent, and at what sales levels would it prefer to pay 10% of its monthly revenue as rent
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