The Fashion Shoe Company operates a chain of womens shoe shops that carry many styles...
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The Fashion Shoe Company operates a chain of womens shoe shops that carry many styles of shoes that are all sold at the same price. Sales personnel in the shops are paid a sales commission on each pair of shoes sold plus a small base salary. The following data pertains to Shop 48 and is typical of the companys many outlets: Per Pair ofShoes Selling price $ 40.00 Variable expenses: Invoice cost $ 15.00 Sales commission 5.00 Total variable expenses $ 20.00 Annual Fixed expenses: Advertising $ 47,000 Rent 38,000 Salaries 185,000 Total fixed expenses $ 270,000 Problem 6-26 Part 66. Refer to the original data. The company is considering eliminating sales commissions entirely in its shops and increasing fixed salaries by $40,000 annually. If this change is made, what will be Shop 48's new break-even point in unit sales and dollar sales?
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