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April 16, 2014

April 16, 2014

Posted by **Sam** on Wednesday, November 14, 2012 at 12:53am.

The following worksheet contains cost and revenue data for Store 36. These data are typical of the company's many outlets:

Per Shirt

Selling price $ 40.00

Variable expenses:

Invoice cost $ 18.00

Sales commission 7.00

Total variable expenses $ 25.00

Annual

Fixed expenses:

Rent $ 80,000

Advertising 150,000

Salaries 70,000

Total fixed expenses $ 300,000

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:

1.

Calculate the annual break-even point in dollar sales and in unit sales for Store 36. (Omit the "$" sign in your response.)

Break-even point in unit sales shirts

Break-even point in dollar sales $

3.

If 19,000 shirts are sold in a year, what would be Store 36's net operating income or loss? (Input the amount as a positive value. Omit the "$" sign in your response.)

$

4.

The company is considering paying the store manager of Store 36 an incentive commission of $3 per shirt (in addition to the salespersons' commissions). If this change is made, what will be the new break-even point in dollar sales and in unit sales? (Omit the "$" sign in your response.)

New break-even point in unit sales shirts

New break-even point in dollar sales $

5.

Refer to the original data. As an alternative to (4) above, the company is considering paying the store manager a $3 commission on each shirt sold in excess of the break-even point. If this change is made, what will be the store’s net operating income or loss if 23,500 shirts are sold in a year? (Input the amount as a positive value. Omit the "$" sign in your response.)

$

6.

Refer to the original data. The company is considering eliminating sales commissions entirely in its stores and increasing fixed salaries by $107,000 annually. If this change is made, what will be the new break-even point in dollar sales and in unit sales in Store 36? (Omit the "$" sign in your response.)

New break-even point in unit sales shirts

New break-even point in dollar sales $

- MSU -
**Writeacher**, Wednesday, November 14, 2012 at 8:49am#1 - What subject is MSU? I've never heard of that.

#2 - You have posted your entire assignment. Surely, you don't think someone here is going to do it all for you, do you?

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