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: Per Pair of Shoes Selling price $ 25.00 Variable expenses: Invoice cost $ 11.50 Sales commission 3.50 Total variable expenses $ 15.00 Annual Fixed expenses: Advertising $ 32,000 Rent 17,000 Salaries 110,000 Total fixed expenses $ 159,000 4. The company is considering paying the Shop 48 store manager an incentive commission of 75 cents per pair of shoes (in addition to the salesperson’s commission). If this change is made, what will be the new break-even point in unit sales and dollar sales? (Do not round intermediate calculations. Round "New break-even point in unit sales" up to the nearest whole unit and round "New break-even point in dollar sales" to the nearest whole dollar.) New break-even point in unit sales pairs New break-even point in dollar sales
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: Per Pair of Shoes Selling price $ 25.00 Variable expenses: Invoice cost $ 11.50 Sales commission 3.50 Total variable expenses $ 15.00 Annual Fixed expenses: Advertising $ 32,000 Rent 17,000 Salaries 110,000 Total fixed expenses $ 159,000 4. The company is considering paying the Shop 48 store manager an incentive commission of 75 cents per pair of shoes (in addition to the salesperson’s commission). If this change is made, what will be the new break-even point in unit sales and dollar sales? (Do not round intermediate calculations. Round "New break-even point in unit sales" up to the nearest whole unit and round "New break-even point in dollar sales" to the nearest whole dollar.) New break-even point in unit sales pairs New break-even point in dollar sales
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
| Per Pair of Shoes | |
|---|---|
| Selling price | $ 25.00 |
| Variable expenses: | |
| Invoice cost | $ 11.50 |
| Sales commission | 3.50 |
| Total variable expenses | $ 15.00 |
| Annual | |
|---|---|
| Fixed expenses: | |
| Advertising | $ 32,000 |
| Rent | 17,000 |
| Salaries | 110,000 |
| Total fixed expenses | $ 159,000 |
4. The company is considering paying the Shop 48 store manager an incentive commission of 75 cents per pair of shoes (in addition to the salesperson’s commission). If this change is made, what will be the new break-even point in unit sales and dollar sales? (Do not round intermediate calculations. Round "New break-even point in unit sales" up to the nearest whole unit and round "New break-even point in dollar sales" to the nearest whole dollar.)
| New break-even point in unit sales | pairs | |
| New break-even point in dollar sales |
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