The Tread Wear Shoe Company operates a chain of shoe stores. The stores sell 10 different styles of inexpensive men's shoes with identical unit costs and selling prices. A unit is defined as a pair of shoes. Each store has a store manager who is paid a fixed salary. Individual salespeople receive a fixed salary and a sales commission. Tread Wear is trying to determine the desirability of opening another store which is expected to have the following revenue and cost relationships.

Selling price	$32.00
Unit variable cost per pair:
Cost of shoes	19.5
Sales commissions	1.6
Total variable costs	$21.10
Annual fixed costs:
Rent	$62,000
Salaries	203,000
Advertising	81,000
Other fixed costs	22,000
Total fixed costs	$368,000

Note that if sales commissions were discontinued for individual salespeople, there would be an $90,000 increase in fixed salaries.

1. Calculate the number of units sold where the operating income under (a) a fixed-salary plan and (b) a lower fixed-salary-and-commission plan (for salespeople only) would be equal. Above that number of units sold, one plan would be more profitable than the other; below that number of units sold, the reverse would occur.

2.As owner, which sales compensation plan would you choose if forecasted annual sales of the new store were at least units? What do you think of the motivation aspects of your chosen compensation plan?

3.Suppose the target operating income is . How many units must be sold to reach the target under (a) the fixed-salary plan and (b) the lower fixed-salary-and-commission plan?

4.You open the new store on January 1, , with the original salary-plus-commission compensation plan in place. Because you expect the cost of the shoes to rise due to inflation, you place a firm bulk order for shoes and lock in the per unit price. But, toward the end of the year, only pairs of shoes are sold and you authorize a markdown of the remaining inventory to $ per unit. Finally all units are sold. Salespeople, as usual, get paid a commission of 5% of revenues. What is the annual operating income for the store?

I need answers to all 4 questions with steps and details, please and Thank You!

Requirement 1. Calculate the number of units sold where the operating income under (a) a fixed-salary plan and (b) a lower fixed-salary-and-commission plan (for salespeople only) would be equal. Above that number of units sold, one plan would be more profitable than the other; below that number of units sold, the reverse would occur. (Round your answer up to the nearest whole unit.) The number of units sold where the operating income under both plans would be equal is 56,250 Requirement 2. As owner, which sales compensation plan would you choose if forecasted annual sales of the new store were at least 57.250 units? What do you think of the motivation aspects of your chosen compensation plan? When sales volume is above 56,250 pairs, the higher fixed-salaries plan results in lower costs and higher operating incomes than the fixed-salary-plus-commission plan. So, for an expected volume of 57,250 pairs, the owner would be inclined to choose the higher fixed-salaries plan. But it is likely that sales volume itself is determined by the nature of the compensation plan. The fixed-salary-plus-commission plan provides a greater motivation to the salespeople, and it may well be that for the same amount of money paid to salespeople, the fixed-salary-plus-commission plan generates a higher volume of sales than the fixed-salary plan. Requirement 3. Suppose the target operating income is 5267,000. How many units must be sold to reach the target under (a) the fixed-salary plan and (b) the lower fixed-salary-and-commission plan? (Round your answers up to the nearest whole unit.) The number of units under the fixed-salary plan would be 58,000 The number of units under the fixed-salary-and-commission plan would be 58,257. Requirement 4. You open the new store on January 1, 2019, with the original fixed-salary-plus-commission compensation plan in place. Because you expect the cost of the shoes to rise due to inflation, you place a firm bulk order for 46,000 shoes and lock in the $19.50 per unit price. But, toward the end of the year, only 44,000 pairs of shoes are sold and you authorize a markdown of the remaining inventory to $16.00 per unit. Finally all units are sold. Salespeople, as usual, get paid a commission of 5% of revenues. What is the annual operating income for the store? Complete the income statement to compute the annual operating income. (Use parentheses or a minus sign for an operating loss.) Tread Wear Shoe Company Operating Income Statement For the year ended December 31, 2019 Revenue $1,440,000 Cost of shoes 897,000 Commissions 72,000 Contribution margin 471,000 Fixed costs 368,000 $ 103,000 Operating income