The Fashion Shoe Company operates a chain of women's shoe shops carrying many styles of shoes all sold for $40 per pair. 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 Fixed expenses: Advertising Rent Salaries Total fixed expenses Per Pair of Shoes $ 40.00 $19.50 4.50 $24.00 Annual $ 30,000 24,000 120,000 $ 174,000 Required: 3. If 9,975 pairs of shoes are sold in a year, what would be Shop 48's net operating income (loss)?
The Fashion Shoe Company operates a chain of women's shoe shops carrying many styles of shoes all sold for $40 per pair. 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 Fixed expenses: Advertising Rent Salaries Total fixed expenses Per Pair of Shoes $ 40.00 $19.50 4.50 $24.00 Annual $ 30,000 24,000 120,000 $ 174,000 Required: 3. If 9,975 pairs of shoes are sold in a year, what would be Shop 48's net operating income (loss)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Fashion Shoe Company operates a chain of women's shoe shops carrying many styles of shoes all sold for $40 per
pair. 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
$ 40.00
Selling price
Variable expenses:
Invoice cost
Sales commission
Total variable expenses
Fixed expenses:
Advertising
Rent
Salaries
Total fixed expenses
$19.50
4.50
$ 24.00
Annual
$ 30,000
24,000
120,000
$ 174,000
Required:
3. If 9,975 pairs of shoes are sold in a year, what would be Shop 48's net operating income (loss)?
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