Sales growth at Bubba's has been great. Because of the rapid growth in sales, Bubba finding the management of certain aspects of the business more difficult, such as restocking inventory and hiring and training new salespeople. PROVIDED BELOW IS SOME information on the : Sales price $80.00; per unit variable expenses : purchase cost 27.50; sales commissions 27.50; total per unit variable costs $55.0; total annual fixed expenses: advertising $257,500; rent 228,000; salaries 360,500; total fixed expenses $846,000. PLEASE REFER TO THIS MESSAGE FOR ADDITIONAL DETAILS OF THE QUESTION

REQUIRED: (approximate time needed to complete this question 30 minutes) 1. Calculate the annual breakeven point, both in terms of units and in terms of sales dollars. (5 marks) 2. If Bubba's sells 35,000 hats, what is its profit or loss? Support your answer by preparing a contribution income statement. (5 marks) 3. Bubba is considering the elimination of sales commissions completely and increasing salaries by an additional $309,000 annually. What would be the new breakeven point in units if the change is made? (3 marks) 4. What would be the profit or loss if 35,000 hats are sold with the new salary plan?