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Threads Unlimited operates a chain of shirt stores that carry many styles of shirts that are all sold at the same price. To encourage sales
Threads Unlimited operates a chain of shirt stores that carry many styles of shirts that are all sold at the same price. To encourage sales personnel to be aggressive in their sales efforts, the company pays a substantial sales commission on each shirt sold. Sales personnel also receive a small basic salary. The following worksheet contains cost and revenue data for Store 45. These data are typical of the company's many outlets: Selling price Per Shirt $ 47 Variable expenses: Invoice cost Sales commission $ 20 7 Total variable expenses $ 27 Annual Fixed expenses: 100,000 Rent $ 160,000 Advertising 60,000 Salaries 320,000 Total fixed expenses Check my work The company has asked you, as a member of its planning group, to assist in some basic analysis of its stores and company policies. Required: a. Calculate the annual break-even point in dollar sales and in unit sales for Store 45. (Do not round intermediate calculations.) shirts Break-even point in unit sales Break-even point in dollar sales b. The company is considering paying the store manager of Store 45 an incentive commission of $4 per shirt (in addition to the salespersons' commissions). If this change is made, what will be the new break-even point in dollar sales and in unit sales? (Do not round intermediate calculations.) shirts New break-even point in unit sales New break-even point in dollar sales
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