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The Fashion Shoe Company operates a chain of women's shoe shops that carry many styles of shoes that are all sold at the same price.
The Fashion Shoe Company operates a chain of women's 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 company's many outlets: Selling price Variable expenses: Invoice cost Sales commission Total variable expenses Fixed expenses: Advertising Rent Salaries Total fixed expenses Per Pair of Shoes $ 25.00 New break-even point in unit sales New break-even point in dollar sales $11.50 3.50 $15.00 Annual $ 32,000 17,000 110,000 $ 159,000 Required: 6. Refer to the original data. The company is considering eliminating sales commissions entirely in its shops and increasing fixed salaries by $35,400 annually. If this change is made, what will be Shop 48's new break-even point in unit sales and dollar sales? Note: Do not round Intermediate calculations. pairs
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