Tom's Sports Wear is a retailer of sports hats located in Atlanta, Georgia. Although Tom's carries numerous styles of sports hats, each hat has approximately the same price and invoice purchase cost, as shown below. Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Tom's has been great. However, the business is very competitive, and Tom has relled on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other sports wear stores. Also, because of the rapid growth in sales, Tom is finding it more difficult to manage certain aspects of the business, such as restocking of inventory and hiring and training new salespeople. $ 32.00 Sales price Per-unit variable costs: Invoice cost Sales commissions Total per-unit variable costs Total annual fixed costs: Advertising Rent Salaries Total fixed costs The annual breakeven point in unit sales is calculated to be: Multiple Choice O O O O O 16,274 units. 15,274 units. 18,274 units. 17,274 units. 14,274 units. 17.10 4.10 $ 21.20 $ 23,150 28,300 124,300 $ 175,750

Tom's Sports Wear is a retailer of sports hats located in Atlanta, Georgia. Although Tom's carries numerous styles of sports hats, each hat has approximately the same price and invoice purchase cost, as shown below. Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Tom's has been great. However, the business is very competitive, and Tom has relled on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other sports wear stores. Also, because of the rapid growth in sales, Tom is finding it more difficult to manage certain aspects of the business, such as restocking of inventory and hiring and training new salespeople. $ 32.00 Sales price Per-unit variable costs: Invoice cost Sales commissions Total per-unit variable costs Total annual fixed costs: Advertising Rent Salaries Total fixed costs The annual breakeven point in unit sales is calculated to be: Multiple Choice O O O O O 16,274 units. 15,274 units. 18,274 units. 17,274 units. 14,274 units. 17.10 4.10 $ 21.20 $ 23,150 28,300 124,300 $ 175,750

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

Tom's Sports Wear is a retailer of sports hats located in Atlanta, Georgia. Although Tom's carries numerous styles of sports hats, each hat has approximately the same price and invoice purchase cost, as shown below.
Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Tom's has been great. However, the
business is very competitive, and Tom has relled on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other sports wear stores. Also, because of the rapid growth in sales,
Tom is finding it more difficult to manage certain aspects of the business, such as restocking of inventory and hiring and training new salespeople.
$ 32.00
Sales price
Per-unit variable costs:
Invoice cost
Sales commissions
Total per-unit variable costs
Total annual fixed costs:
Advertising
Rent
Salaries
Total fixed costs
The annual breakeven point in unit sales is calculated to be:
Multiple Choice
O
O
O
O
O
16,274 units.
15,274 units.
18,274 units.
17,274 units.
14,274 units.
17.10
4.10
$ 21.20
$ 23,150
28,300
124,300
$ 175,750

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