1.
Break even points in units = Total fixed expenses / Contribution margin per pair
Break even points in units = $45,000 / $15 = 3,000 pairs
Break even point in dollars = Total fixed expenses / Contribution margin ratio
Break even point in dollars = $45,000 / 50% (15/30*100) = $90,000
3.
Unit sale to attain target profit = Total fixed expenses+Target profit / Contribution margin per pair
Unit sale to attain target profit = $45,000+22,500 / $15 = 4,500 pairs
4.
Incremental income = Incremental sales*contribution ratio - Incremental fixed expenses
Incremental income = $39,000*50% - $9,000 = $10,500
As per above results, Yes Angle should convert the position.
5.
a. Degree of operating leverage = Contribution / Operating income
Degree of operating leverage = $60,000 / $15,000 = 4
b. Increase in net operating income = Degree of operating leverage * Increase in sales
Increase in net operating income = 4 * 50 = 200%
(The follo.ving information applies to the questions displayed below.) Angie Silva has recently opened The Sandal...
Required information [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 $ 30 Variable expenses per pair of sandals 15 Contribution margin per pair of sandals $ 15 Fixed expenses per...
Required information 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 Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per year: Building rental Equipment depreciation...
Required information (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: $ 40 20 20 $ Sales price per pair of sandals Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per...
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 Variable expenses per pair of sandals 26 12 Contribution margin per pair of sandals Fixed expenses per year: Building rental Equipment depreciation Selling Administrative 3,200 4,000 2,400 6,400 Total fixed expenses...
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 $ 32 Variable expenses per pair of sandals 16 Contribution margin per pair of sandals $ 16 Fixed expenses per year: Building rental $ 9,600 Equipment depreciation 12,000 Selling 9,600 Administrative...
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 $ 20 Variable expenses per pair of sandals 14 Contribution margin per pair of sandals $ 6 Fixed expenses per year: Building rental $ 1,800 Equipment depreciation 1,800 Selling 1,800 Administrative...
HOMEWORK 3 CHAPTER3 Question 5 [of 5) Save & Exit Submit 3.80 points Angie Silva has receniy opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. Angie has just received a degree in business and she is anxious to apply the principles she has leamed to her business. In time, she hopes to open a chain of sandal shops. As a first step, she has prepared the following analysis for her new store: 096 224...
Required Information The following information applies to the questions displayed below.) The Fashion Shoe Company operates a chain of women's 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 company's many outlets: Per Pair of Shoes Selling price Variable expenses:...
Required information (The following information applies to the questions displayed below.) Income Statement Sales (1,898 units) Variable expenses Contribution margin Fixed expenses Net operating income 45, ose 31.500 13,500 8.640 4,860 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? The new sales volume is within the relevant range. Net operating income Required information (The following information applies to the questions displayed below.) Income...
Required Information [The following information applies to the questions displayed below) The Fashion Shoe Company operates a chain of women's 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 company's many outlets Per Pair of Shoes s 20.pe Selling price...