The Fashion Shoe Company operates a chain of womens shoe shops that carry many styles...
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Accounting
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
$
40.00
Variable expenses:
Invoice cost
$
19.50
Sales commission
4.50
Total variable expenses
$
24.00
Annual
Fixed expenses:
Advertising
$
38,000
Rent
28,000
Salaries
140,000
Total fixed expenses
$
206,000
3. If 12,175 pairs of shoes are sold in a year, what would be Shop 48s net operating income (loss)?
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