Question 2. Company B operates a chain of stores that sell different styles of inexpensive products...

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Question 2. Company B operates a chain of stores that sell different styles of inexpensive products with identical unit costs and selling prices. The selling price is 27,5 $ per unit. Each store has a store manager who is paid a fixed salary. Individual salespeople receive salary and sales commission. Company B is considering opening another store that is expected to have the cost relationships shown here: Costs Depreciation Manufacturing cost of a product Salaries Lease payment Miscellaneous fixed costs Sales commission Amount ($) 72.000 17,5 208.000 95.000 1/15 of total of other fixed costs 2 a) If, in addition to his fixed salary, the store manager is paid a commission of 0,50 $ per unit in excess of the breakeven point, what would be the store's operating income if 62.750 units were sold (10 points)? b) If sales commissions are discontinued and fixed salaries are raised by 75.000 $, what would be the annual breakeven point in revenues (20 points)? Question 2. Company B operates a chain of stores that sell different styles of inexpensive products with identical unit costs and selling prices. The selling price is 27,5 $ per unit. Each store has a store manager who is paid a fixed salary. Individual salespeople receive salary and sales commission. Company B is considering opening another store that is expected to have the cost relationships shown here: Costs Depreciation Manufacturing cost of a product Salaries Lease payment Miscellaneous fixed costs Sales commission Amount ($) 72.000 17,5 208.000 95.000 1/15 of total of other fixed costs 2 a) If, in addition to his fixed salary, the store manager is paid a commission of 0,50 $ per unit in excess of the breakeven point, what would be the store's operating income if 62.750 units were sold (10 points)? b) If sales commissions are discontinued and fixed salaries are raised by 75.000 $, what would be the annual breakeven point in revenues (20 points)?

Answer rating: 100% (QA)

a Calculating Operating Income with Managers Commission Breakeven Point in Units 208000950002 275175 ... View the full answer