K The WalkRite Shoe Company operates a chain of shoe stores that sell 10 different styles...
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K The WalkRite Shoe Company operates a chain of shoe stores that sell 10 different styles of inexpensive men's shoes with identical unit costs and selling prices. A unit is defined as a pair of shoes. Each store has a store manager who is paid a fixed salary. Individual salespeople receive a fixed salary and a sales commission. WalkRite is considering opening another store that is expected to have the revenue and cost relationships shown here. (Click the icon to view the revenue and cost information.) Read the requirements. Requirement 1a. What is the annual breakeven point in units sold? Determine the formula used to calculate the breakeven number of units, then calculate the number of units that must be sold to break even. Fixed costs $ 351,000 Contribution margin per unit 36 = = Breakeven number of units 9,750 Requirement 1b. What is the annual breakeven point in revenues? Determine the formula used to calculate the breakeven revenue, then calculate WalkRite's annual breakeven point in revenues. Breakeven number of units 9,750 Selling price 64 = Breakeven revenues = $ 624,000 Requirement 2. If 37,000 units are sold, what will be the store's operating income (loss)? Determine the formula used to calculate the operating income (loss) and then enter the amounts to determine the store's oneratina income (loss) (Use parentheses or a minus sign for a loss ) - Requirements Data table A B 1 Unit Variable Data (per pair of shoes) Annual Fixed Costs 2 Selling price 3 Cost of shoes 4 Sales commission $ 64.00 Rent $ $ 24.00 Salaries 50,000 237,000 4.00 Advertising 47,000 5 Variable cost per unit 28.00 Other fixed costs 17,000 6 Total fixed costs $ 351,000 Consider each question independently. 1. What is the annual breakeven point in (a) units sold and (b) revenues? 2. If 37,000 units are sold, what will be the store's operating income (loss)? 3. If sales commissions are discontinued and fixed salaries are raised by a total of $9,000, what would be the annual breakeven point in (a) units sold and (b) revenues? 4. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $6.00 per unit sold, what would be the annual breakeven point in (a) units sold and (b) revenues? 5. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $6.00 per unit in excess of the breakeven point, what would be the store's operating income if 57,000 units were sold? K The WalkRite Shoe Company operates a chain of shoe stores that sell 10 different styles of inexpensive men's shoes with identical unit costs and selling prices. A unit is defined as a pair of shoes. Each store has a store manager who is paid a fixed salary. Individual salespeople receive a fixed salary and a sales commission. WalkRite is considering opening another store that is expected to have the revenue and cost relationships shown here. (Click the icon to view the revenue and cost information.) Read the requirements. Requirement 1a. What is the annual breakeven point in units sold? Determine the formula used to calculate the breakeven number of units, then calculate the number of units that must be sold to break even. Fixed costs $ 351,000 Contribution margin per unit 36 = = Breakeven number of units 9,750 Requirement 1b. What is the annual breakeven point in revenues? Determine the formula used to calculate the breakeven revenue, then calculate WalkRite's annual breakeven point in revenues. Breakeven number of units 9,750 Selling price 64 = Breakeven revenues = $ 624,000 Requirement 2. If 37,000 units are sold, what will be the store's operating income (loss)? Determine the formula used to calculate the operating income (loss) and then enter the amounts to determine the store's oneratina income (loss) (Use parentheses or a minus sign for a loss ) - Requirements Data table A B 1 Unit Variable Data (per pair of shoes) Annual Fixed Costs 2 Selling price 3 Cost of shoes 4 Sales commission $ 64.00 Rent $ $ 24.00 Salaries 50,000 237,000 4.00 Advertising 47,000 5 Variable cost per unit 28.00 Other fixed costs 17,000 6 Total fixed costs $ 351,000 Consider each question independently. 1. What is the annual breakeven point in (a) units sold and (b) revenues? 2. If 37,000 units are sold, what will be the store's operating income (loss)? 3. If sales commissions are discontinued and fixed salaries are raised by a total of $9,000, what would be the annual breakeven point in (a) units sold and (b) revenues? 4. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $6.00 per unit sold, what would be the annual breakeven point in (a) units sold and (b) revenues? 5. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $6.00 per unit in excess of the breakeven point, what would be the store's operating income if 57,000 units were sold?
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Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0131495388
12th edition
Authors: Charles T. Horngren, Srikant M. Datar, George Foster
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