[The following information applies to the questions displayed below.] Angie Silva has recently...
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[The following information applies to the questions displayed below.]
Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. In time, she hopes to open a chain of sandal shops. As a first step, she has gathered the following data for her new store:
Sales price per pair of sandals
$
34
Variable expenses per pair of sandals
17
Contribution margin per pair of sandals
$
17
Fixed expenses per year:
Building rental
$
12,800
Equipment depreciation
12,800
Selling
10,200
Administrative
15,200
Total fixed expenses
$
51,000
4. Angie now has two salespersons working in the storeone full time and one part time. It will cost her an additional $8,000 per year to convert the part-time position to a full-time position. Angie believes that the change would increase annual sales by $40,800. Should she convert the position? Use the incremental approach.
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