Accounting

posted by .

Shirts 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 36. These data are typical of the company's many outlets:

Per Shirt
Selling price $ 50.00

Variable expenses:
Invoice cost $ 23.00
Sales commission 9.00

Total variable expenses $ 32.00

Annual
Fixed expenses:
Rent $ 176,400
Advertising 93,200
Salaries 83,200

Total fixed expenses $ 352,800


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. (Do not round intermediate calculations. Omit the "$" sign in your response.)


Break-even point in unit sales shirts
Break-even point in dollar sales $

3.

If 18,300 shirts are sold in a year, what would be Store 36's net operating income or loss? (Input the amount as a positive value. Do not round intermediate calculations. Omit the "$" sign in your response.)

$

4.

The company is considering paying the store manager of Store 36 an incentive commission of $0.80 per shirt (in addition to the salespersons' commissions). If this change is made, what will be the new break-even point in dollar sales and in unit sales? (Do not round intermediate calculations. Round your final answers to 2 decimal places. Omit the "$" 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 $0.80 commission on each shirt sold in excess of the break-even point. If this change is made, what will be the store’s net operating income or loss if 23,020 shirts are sold in a year? (Input the amount as a positive value. Do not round intermediate calculations. Omit the "$" 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 $135,900 annually. If this change is made, what will be the new break-even point in dollar sales and in unit sales in Store 36? (Do not round intermediate calculations. Omit the "$" sign in your response.)


New break-even point in unit sales shirts
New break-even point in dollar sales $

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Probability

    70% of all burger chain stores decided to advertise in their local newspaper. Of those chain stores that advertised in thier local newspapers, 60% had an increase in sales. Of those chain stores that did not advertise, 25% had an increase …
  2. it

    Explain how you would create the users for the sales organization unit and how to set up work groups in this particular situation. Keep in mind that you may have to name certain applications and allowable tasks for each individual …
  3. Managerial Accounting

    The Fashion Shoe Company operates a chain of women’s shoe shops around the country. The shops carry many styles of shoes that are all sold at the same price. Sales personnel in the shops are paid a substantial commission on each …
  4. math

    The Math-Is-Fun T-shirt Company manufactures and sells screen-printed t-shirts. The fixed costs of operation for the company are $75,750 per month. T-shirts are sold to wholesale buyers for $8.99 each, but only cost the company $3.20 …
  5. MSU

    Shirts 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 …
  6. math

    For a fundrasier, the Best Buddies club sold t-shirts. The adult shirts were $15 per shirt and the youth shirts were $12 per shirt, and they made a total of $330 on the shirts. If they sold a total of 26 shirts, how many of each did …
  7. Statistics

    1. A company decides to add a new program that prepares randomly selected sales personnel to increase their number of sales per month. The mean number of sales per month for the overall population of sales people at this national company …
  8. Math

    Hi, I am doing my summer assignment and I do not understand a problem. The question is about a girl who bought 4 shirts and 2 pairs of pants. The total cost of the shirts was $60.00. The total cost of the pants was $70.00. The total …
  9. Math

    Store a has a promotion if you Bryce three shirts you get 25% off the total price of the three shirts store be has the same shirts on sale with a promotion that if you buy three shirts you get the third shirt on a 50% discount store …
  10. math

    t shirt company makes polo shirts with expectation that it will earn a profit of 50% by selling each shirt at its marked price.but during delivery to show rooms,17% of shirts were completely solied and hence could not be sold, 18% …

More Similar Questions