16. New BEP, change in commission expense. Melsie Shirts operates a chain of stores Driend the country. The stores carry many styles of shirts that are all sold at the same ton ot pales personnel are paid substantial sales commission on each shirt sold on CHAPTER 5 207 PROFIT PLANNING AND COST-VOLUME-PROFIT ANALYSIS Per Year Per Shirt P 45 Sales price Variable expenses: Invoice cost Sales commissions Total variable expenses Fixed expenses: Rent Ādvertising Salaries Total fixed expenses P 80,000 280,000 140.000 P 500.000 18 Р 25 Required: 1.. Calculate the annual breakeven point in units and in pesos for Store 22. If 22,000 shirts are sold in a year, what would be Store 22's net income or loss? 3. Suppose the company pays the store manager an incentive commission of P4 per shirt separate from that of the salespersons' commission, what will be the new breakeven point in units and in pesos? 4. Suppose the company pays the store manager an incentive commission of P4 shirt separate from that of the salespersons' commission, what will be the new profit or loss if 34,000 units shirts are sold? 2. per
16. New BEP, change in commission expense. Melsie Shirts operates a chain of stores Driend the country. The stores carry many styles of shirts that are all sold at the same ton ot pales personnel are paid substantial sales commission on each shirt sold on CHAPTER 5 207 PROFIT PLANNING AND COST-VOLUME-PROFIT ANALYSIS Per Year Per Shirt P 45 Sales price Variable expenses: Invoice cost Sales commissions Total variable expenses Fixed expenses: Rent Ādvertising Salaries Total fixed expenses P 80,000 280,000 140.000 P 500.000 18 Р 25 Required: 1.. Calculate the annual breakeven point in units and in pesos for Store 22. If 22,000 shirts are sold in a year, what would be Store 22's net income or loss? 3. Suppose the company pays the store manager an incentive commission of P4 per shirt separate from that of the salespersons' commission, what will be the new breakeven point in units and in pesos? 4. Suppose the company pays the store manager an incentive commission of P4 shirt separate from that of the salespersons' commission, what will be the new profit or loss if 34,000 units shirts are sold? 2. per
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:16. New BEP, change in commission expense. Melsie Shirts operates a chain of stores
Driend the country. The stores carry many styles of shirts that are all sold at the same
ton ot pales personnel are paid substantial sales commission on each shirt sold on
CHAPTER 5
207
PROFIT PLANNING AND COST-VOLUME-PROFIT ANALYSIS
Per Year
Per Shirt
P 45
Sales price
Variable expenses:
Invoice cost
Sales commissions
Total variable expenses
Fixed expenses:
Rent
Ādvertising
Salaries
Total fixed expenses
P 80,000
280,000
140.000
P 500.000
18
Р 25
Required:
1.. Calculate the annual breakeven point in units and in pesos for Store 22.
If 22,000 shirts are sold in a year, what would be Store 22's net income or loss?
3. Suppose the company pays the store manager an incentive commission of P4 per
shirt separate from that of the salespersons' commission, what will be the new
breakeven point in units and in pesos?
4. Suppose the company pays the store manager an incentive commission of P4
shirt separate from that of the salespersons' commission, what will be the new
profit or loss if 34,000 units shirts are sold?
2.
per
Expert Solution
Step 1
Hi student
Since there are multiple subparts, we will answer only first three subparts.
Breakeven sales point is that sales point at which business is only recovering its fixed costs and variable costs. Business is not earning any gains or losing any profits at this point.
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