The Modern Shoe Company operates ladies shoe shop. The shop deals in many styles of shoes that are sold at the same price. The sales personnel in the shop are paid a substantial commission on each pair of shoes sold, in addition to small salary, in order to encourage them to be aggressive in their sales efforts. The following data of a shop is extracted from the record:- Per pair of shoes Sales price Rs. 900 Variable expenses: Invoice cost Rs. 405 Sales commission Rs. 135 Fixed expenses Salaries Rs. 180,000 annually Rent Rs. 150,000 annually Advertising Rs. 120,000 annually Required: a) Compute the annual breakeven point in sales revenues and in units of the shop. b) If 2,500 pairs of shoes are sold in a year, compute the net operating income of the shop c) The management is considering paying the shop manager an incentive commission of Rs. 15 per pair of shoes in addition to the existing commission. If this change is made, calculate the new breakeven point in sales revenues and in units. d) Referring to the original data, the management is considering eliminating sales commission of the sales staff and increasing the fixed salaries by Rs. 180,000 annually. If this change is implemented, compute the new breakeven point in sales revenues and in units of the shop. Evaluate this proposal for decision by the management. (Marks 08)