Answer:
Instructions are listed below
Explanation:
Giving the following information:
UNIT VARIABLE DATA:
Selling price $60
Cost of shoes 37
Sales commission 3
Total Variable cost per unit 40
ANNUAL FIXED COSTS
Rent $30,000
Salaries 100,000
Advertising 40,000
Other fixed costs 10,000
TOTAL FIXED COSTS $180,000
1) Break-even point (units)= fixed costs/ contribution margin
Break-even point (units)= 180,000/ (60 - 40)= 9,000 pair of shoes
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 180,000 / (20/60)= $540,000
2) Q= 8,000
Income= quantity* contribution margin - fixed costs
Income= 8000*20 - 180,000= $-20,000
3) Variable costs= $37
Fixed costs= 180,000 + 15,500= $195,500
Break-even point (units)= 195,500 / (60 - 37)= 8,500 pair of shoes
Break-even point (dollars)= 195,500 / (23/60)= $510,000
4) Comission= $2
Variable costs= 42
Break-even point (units)= 180,000 / (60 - 42)= 10,000 pair of shoes
Break-even point (dollars)= 180,000 / (18/60)= $600,000
5) comission= $2 post 9,000 pair of shoes
Income= 9,000*20 + 3,000*18 - 180,0000= $54,000
