PROBLEM 5-26 CVP Applications; Break-Even Analysis; Graphing LOS-1, LO5-2, LO5-4, LO5-5The Fashion Shoe Company operates a chain of women's shoe shops that carry many styles ofshoes that are all sold at the same price. Sales personnel in the shops are paid a sales commissionon 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:1.2.4.5.Selling price..Variable expenses:Invoice costSales commissionTotal variable expenses.6.Fixed expenses:AdvertisingRent..SalariesTotal fixed expenses.Per Pair ofShoes$30.00Required:What is Shop 48's annual break-even point in unit sales and dollar sales?Prepare a CVP graph showing cost and revenue data for Shop 48 from zero shoes up to 17,000pairs of shoes sold each year. Clearly indicate the break-even point on the graph.3.If 12,000 pairs of shoes are sold in a year, what would be Shop 48's net operating income(loss)?The company is considering paying the Shop 48 store manager an incentive commission of75 cents per pair of shoes (in addition to the salesperson's commission). If this change ismade, what will be the new break-even point in unit sales and dollar sales?Refer to the original data. As an alternative to (4) above, the company is considering payingthe Shop 48 store manager 50 cents commission on each pair of shoes sold in excess of thebreak-even point. If this change is made, what will be Shop 48's net operating income (loss) if15,000 pairs of shoes are sold?Refer to the original data. The company is considering eliminating sales commissions entirelyin its shops and increasing fixed salaries by $31,500 annually. If this change is made, whatwill be Shop 48's new break-even point in unit sales and dollar sales? Would you recommendthat the change be made? Explain.$13.504.50$18.00Annual$ 30,00020,000100,000$150,000

Break Even Point (BEP) :— That is the point at which total cost and total revenue are equal. The…

PROBLEM 5-26 CVP Applications; Break-Even Analysis; Graphing LO5-1, LO5-2, LO5-4, LO5-5 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: Selling price. Variable expenses: Invoice cost.. Sales commission Total variable expenses. 1. 2. Fixed expenses: Advertising.. Rent...... Salaries.... Total fixed expenses... **** Per Pair of Shoes $30.00 $13.50 4.50 $18.00 Annual $ 30,000 20,000 100,000 $150,000 Required: What is Shop 48's annual break-even point in unit sales and dollar sales? Prepare a CVP graph showing cost and revenue data for Shop 48 from zero shoes up to 17,000 pairs of shoes sold each year. Clearly indicate the break-even point on the graph. 3. If 12,000 pairs of shoes are sold in a year, what would be Shop 48's net operating income (loss)?

PROBLEM 5-26 CVP Applications; Break-Even Analysis; Graphing LO5-1, LO5-2, LO5-4, LO5-5 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: Selling price. Variable expenses: Invoice cost.. Sales commission Total variable expenses. 1. 2. Fixed expenses: Advertising.. Rent...... Salaries.... Total fixed expenses... **** Per Pair of Shoes $30.00 $13.50 4.50 $18.00 Annual $ 30,000 20,000 100,000 $150,000 Required: What is Shop 48's annual break-even point in unit sales and dollar sales? Prepare a CVP graph showing cost and revenue data for Shop 48 from zero shoes up to 17,000 pairs of shoes sold each year. Clearly indicate the break-even point on the graph. 3. If 12,000 pairs of shoes are sold in a year, what would be Shop 48's net operating income (loss)?

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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Question 2 Joan Zorba orders calculators for her office supply stores. Each calculator cost $35, currently she is ordering 230. Daily demand for these calculators is 5. The cost to re-order this item is estimated at $44, while the annual inventory holding cost is 22%. Orders are received two working days after an order is placed. The office operates 52 weeks per year, 5 days per week Determine the reorder point using EOQ. Greater than or equal to 43 and less than or equal to 49 Greater than or equal to 431 and less than or equal to 443 Greater than or equal to 2053 and less than or equal to 2064 Greater than or equal to 6 and less than or equal to 25 4 pts < Previous Next VIV
Pharoah Industries manufactures chairs and tables that are in high demand by local office furniture stores. Following is information for each of these products: Selling price per item Variable cost per item Contribution margin per item Machine hours per item Chairs O $11270 $11520 $10880 O $17390 $78.00 61.00 $17.00 1.60 Tables $95.00 77.00 $18.00 1.60 Pharoah has 1024 machine hours available each month. The demand for chairs is 610 units per month and the demand for tables is 390 units per month. If Pharoah allocates its production capacity between the chairs and tables so that it maximizes the company's contribution margin, what will the total contribution margin be?
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Exercise 7-5 (Algo) Product and Customer Profitability Analysis [LO7-4, LO7-5] Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Activity Rate $ 18 per direct labor-hour $190 per order $ 262 per custom design $ 422 per customer Selling price per glider Direct materials cost per glider The company's direct labor rate is $22 per hour. Customer margin Standard Model 10 2 0 29.50 $ 1,875 $…
3-36 Contribution margin, gross margin, and margin of safety. Roma Skincare manufactures and sells a face cream to small specialty stores in Victoria, Australia. It presents the monthly operating income state- ment shown here to Jacob Scott, a potential investor in the business. Help Mr. Scott understand Roma Skincare's cost structure. Sabnuo bluow to tadt geg awollg em noitudintnoo brstinu neq nip Tebquod bns aslea tinu ni tniog Formulas moo erit steluals3 .f trom ert zi terW S Page Layout las Data Joxe Review atinu 000,00 Bruno Bow CWOODW0193802 91 A View E 2 1 of moitibbs nl wen erit ed sand 6 pritsiaqo .d erit of nate Home Insert SZ ĀRU STCOD 0 1 be ting viace 101 01.03 bisq asRoma Skincare andam 2 Operating Income Statement June 2020 3 Units sold Revenues Cost of goods sold 4 5 6 Variable manufacturing costs 7 Fixed manufacturing costs be 8 Total cost of goods sold Spe 9 Gross margin 4. Wh 5. If 10 Operating costs: 21800 11 6000,00 12 000,00 13 000.08 14 Operating income 000.8…
Claudia wants to perform a break-even analysis on her very busy casual-dining operation. She has obtained the following operating results from last month's income statement and POS system sales records: Guests served: Sales: Variable costs: Fixed costs: Total costs: Profit: 25,000 $210,000 $75,000 $110,000 $185,000 $25,000
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