The Walker Shoe Company operates a chain of shoe stores. The stores sell different styles of inexpensive mens 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 sales commission and a fixed salary. The company is trying to determine whether to open another store, which is expected to have the following revenue and cost relationships:

Unit variable data per pair of shoes:

Selling price $

Cost of shoes $

Sales commissions

Variable costs per unit

$

Annual fixed costs:

Rent $

Salaries

Advertising

Other fixed costs

Total fixed costs $

SHOW WORK

points Given the information above, a what is the annual breakeven point in units sold and b the breakeven point in revenue dollars?

points If sales commissions were discontinued for individual salespeople in favor of a $ increase in fixed salaries, what would be the annual breakeven point in units sold?

points At what level of sales units ie pairs of shoes should the firm be indifferent between the compensation plan in the original data and the new compensation plan described in

points Refer to your answer in If sales are expected to be units, which compensation plan should be chosen? Explain your answer and provide supporting calculations.

points Refer to the original data. If the new store must earn an aftertax profit of at least $ and the corporate tax rate is what should be the selling price per unit if sales are expected to be units?