Question

art 1 of 5 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. Ints The following data pertains to Shop 48 and is typical of the company's many outlets: Skipped Per Pair of Shoes $ 40.00 eBook Selling price Variable expenses: Invoice cost Sales commission Total variable expenses $ Print $ 16.00 4.00 20.00 Annual References Fixed expenses: Advertising Rent Salaries Total fixed expenses $ 43,000 35,000 165,000 $ 243,000

Answer 1

Sold) Break-even froiul. (In Unit sales) => - Total fixed Costa Courribution Margin per pair Totaal fixed Cost = $243,000 Contribution Margin foer pair - Selling Price persoair - Total Variable Exprense Perpair - $40 a $20 - $20 - Break-even point in unil Sales = $243,000 = 12,150 vuit's Break-even point in dollar Sales at - - Break-even point in Unil-Sales Selling price perpair = $40 __ 12,150 Units X $486,000 _

_ Sol.(3) - The Fashion Shoe Company Income Statement of Production of 11,450 Pairs Particulars Amount. Sales (11,450 Pair's X $40) $ 458,000 lesson Variabile Expensesi Invoice Cost (11,450 Paig's X $16) | $(183,200) Sales Commission (11.450 pair's X $4) $ ( 45, 800) Contribution Margin | $ 229,000 com fixed Expenses:- Advertising $ (43.000) | $ ( 35,000) Salaries $(1 65,000) Net Operating Profil (loss) | $(14000) Rent Net operating loss = $14,000

Sol.(4) Break-even point In Unit Saules > Total fixed Exforenses, Contribution Margin per pair Total fixed Expenses = $243,000 Contribution Margin ker pair => = Selling Price per pair - Total Variable Expenses per pair. a $ úo - ($20+ $0.80) E $40 - $20.80 __ë $19.20 Break-even point in vuit saules = $243,000 $19.20 = 12,656 Unit's Break-even point In dollar Sales ) - Break-even poiul. In Louit Salex Selling Price per peir = 12,656 Unt's X $40 $ 506,240

Solesi Particolais Amout. Saules (14,350poeirs x $40.). $574,000 lesso Variable expenses. - 12,150 pairs X $20. $243,000) 2200 Beirs x $ 20.55 $ 45,210) Courribution Margin $ 285,790 less fixed expenses $(243,000) Net operating Income $ 42,790 Net operating Income is $42790 Working Note: Break even saules = 12,150 pairs Excess Sales. =) z Actual Sales - Break even z 14,350 pairs - 12, 150 pain's = 2200 pairs. seules

Sol. (6) Break-even poin. In weil Soulies at - Totaud fixed Expenses Contribution Margin per pair Total fixed Expenses = $243.000 + $ 33.000_ = $ 276,000 Contribution Margin per pair Selling price per peri's – Variable Expresses per pair = $V40 - $16 a $24 Break-even boime len Wuit Saules a $275,000 $24 = 11500 Uuil's Break-even point in dollar Sales = Break-evens boiul In Wail: Salex Selling price bespair 11,500 Unit's X $40 $ 460,000