Question
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.
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 $ 20.00 Variable expenses: Invoice cost $ 5.00 Sales commission 5.00 Total variable expenses $ 10.00 Annual Fixed expenses: Advertising $ 36,000 Rent 25,000 Salaries 125,000 Total fixed expenses $ 186,000. What is Shop 48's annual break-even point in unit sales and dollar sales?
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