The Fashion Shoe Company operates a chain of womens shoe shops carrying many styles of...
80.2K
Verified Solution
Link Copied!
Question
Accounting
The Fashion Shoe Company operates a chain of womens shoe shops carrying many styles of shoes all sold for $25 per pair. 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
$ 25.00
Variable expenses:
Invoice cost
$ 11.50
Sales commission
3.50
Total variable expenses
$ 15.00
Annual
Fixed expenses:
Advertising
$ 44,000
Rent
34,000
Salaries
170,000
Total fixed expenses
$ 248,000
Required:
6. Refer to the original data. The company is considering eliminating sales commissions entirely in its shops and increasing fixed salaries by $35,500 annually. If this change is made, what will be Shop 48's new break-even point in unit sales and dollar sales?
Note: Do not round intermediate calculations.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
