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3. Another idea that Gretchen had was to eliminate sales commissions. Hallstead's was the onlyjewelry store in the city that paid sales commissions, and although both Grandfather and Father had insisted that commissions were one of the reasons for their success, Gretchen had her doubts? How would the elimination of sales commissions affect the breakeven volume?

3. Another idea that Gretchen had was to eliminate sales commissions. Hallstead's was the onlyjewelry store in the city that paid sales commissions, and although both Grandfather and Father had insisted that commissions were one of the reasons for their success, Gretchen had her doubts? How would the elimination of sales commissions affect the breakeven volume?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3. Another idea that Gretchen had was to eliminate sales commissions. Hallstead's was the onlyjewelry store in the city that paid sales commissions, and although both Grandfather and Father had insisted that commissions were one of the reasons for their success, Gretchen had her doubts? How would the elimination of sales commissions affect the breakeven volume? Particulars Sales value Less: cost of goods sold Contribution Less: fixed costs: Salaries Advertisement Administrative Exp Rent Depreciation Misc Exp Net Income Number of customers order is Therefore Contribution/ order is Total fixed cost is Therefore, breakeven point in No. of sales tickets is Breakeven value 2003 8583 4326 4257 2021 254 418 420 84 53 1007 2004 8102 4132 3970 4078 6553 2081 250 425 420 84 93 617 2006 10711 5570 5141 5341 5316 0.7970418 0.7468021 3250 3353 4490 6843 3215 257 435 840 142 122 130 6897 0.7453965 5011 6723 10440
Transcribed Image Text:3. Another idea that Gretchen had was to eliminate sales commissions. Hallstead's was the onlyjewelry store in the city that paid sales commissions, and although both Grandfather and Father had insisted that commissions were one of the reasons for their success, Gretchen had her doubts? How would the elimination of sales commissions affect the breakeven volume? Particulars Sales value Less: cost of goods sold Contribution Less: fixed costs: Salaries Advertisement Administrative Exp Rent Depreciation Misc Exp Net Income Number of customers order is Therefore Contribution/ order is Total fixed cost is Therefore, breakeven point in No. of sales tickets is Breakeven value 2003 8583 4326 4257 2021 254 418 420 84 53 1007 2004 8102 4132 3970 4078 6553 2081 250 425 420 84 93 617 2006 10711 5570 5141 5341 5316 0.7970418 0.7468021 3250 3353 4490 6843 3215 257 435 840 142 122 130 6897 0.7453965 5011 6723 10440
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