The Famous Shoe Company operates a chain of shoe stores that sell 10 different styles of...

  

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The Famous 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. Famous 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. Breakeven number of units Requirement 1b. What is the annual breakeven point in revenues? Determine the formula used to calculate the breakeven revenue, then calculate Famous's annual breakeven point in revenues. Breakeven revenues Requirement 2. If 31,000 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 operating income (loss). (Use parentheses or a minus sign for a loss.) Requirement 3a. If sales commissions are discontinued and fixed salaries are raised by a total of $16,000, what would be the annual breakeven point in units sold? The annual breakeven point in units sold would be Requirement 3b. If sales commissions are discontinued and fixed salaries are raised by a total of $16.000, what would be the annual breakeven point in revenues? The annual breakeven point in revenues would be $ Requirement 4a. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $1.00 per unit sold, what would be the annual breakeven point in units sold? (Do not round any of your calculations.) The annual breakeven point in units sold would be Requirement 4b. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $1.00 per unit sold, what would be the annual breakeven point in revenues? (Do not round any of your calculations.) Using the same information as requirement 4a, calculate the breakeven point in revenues. The annual breakeven point in revenues would be $ Requirement 5. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $1.00 per unit in excess of the breakeven point, what would be the store's operating income if 59,000 units were sold? (Do not round any of your calculations.) Operating income would be $ units. Operating - income (loss) units. i Data Table Unit Variable Data (per pair of shoes) $ 50.00 $ Selling price Cost of shoes Sales commission Variable cost per unit $ 20.00 4.00 24.00 Print Annual Fixed Costs $ Rent Salaries Advertising Other fixed costs Total fixed costs Done 45,000 156,000 45,000 14,000 $ 260,000 X The Famous 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. Famous 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. Breakeven number of units Requirement 1b. What is the annual breakeven point in revenues? Determine the formula used to calculate the breakeven revenue, then calculate Famous's annual breakeven point in revenues. Breakeven revenues Requirement 2. If 31,000 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 operating income (loss). (Use parentheses or a minus sign for a loss.) Requirement 3a. If sales commissions are discontinued and fixed salaries are raised by a total of $16,000, what would be the annual breakeven point in units sold? The annual breakeven point in units sold would be Requirement 3b. If sales commissions are discontinued and fixed salaries are raised by a total of $16.000, what would be the annual breakeven point in revenues? The annual breakeven point in revenues would be $ Requirement 4a. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $1.00 per unit sold, what would be the annual breakeven point in units sold? (Do not round any of your calculations.) The annual breakeven point in units sold would be Requirement 4b. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $1.00 per unit sold, what would be the annual breakeven point in revenues? (Do not round any of your calculations.) Using the same information as requirement 4a, calculate the breakeven point in revenues. The annual breakeven point in revenues would be $ Requirement 5. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of $1.00 per unit in excess of the breakeven point, what would be the store's operating income if 59,000 units were sold? (Do not round any of your calculations.) Operating income would be $ units. Operating - income (loss) units. i Data Table Unit Variable Data (per pair of shoes) $ 50.00 $ Selling price Cost of shoes Sales commission Variable cost per unit $ 20.00 4.00 24.00 Print Annual Fixed Costs $ Rent Salaries Advertising Other fixed costs Total fixed costs Done 45,000 156,000 45,000 14,000 $ 260,000 X

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Contribution Margin per unit 5024 26 1a Break Even Point in units Fix... View the full answer