The Fashion Shoe Company operates a chain of womens shoe shops carrying many styles of...

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Accounting

The Fashion Shoe Company operates a chain of womens shoe shops carrying many styles of shoes all sold for $25 per pair. 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 of Shoes

Selling price $ 25.00

Variable expenses:

Invoice cost $ 11.50

Sales commission 3.50

Total variable expenses $ 15.00

Annual

Fixed expenses:

Advertising $ 44,000

Rent 34,000

Salaries 170,000

Total fixed expenses $ 248,000

	Per Pair of Shoes
Selling price	$ 25.00
Variable expenses:
Invoice cost	$ 11.50
Sales commission	3.50
Total variable expenses	$ 15.00

	Annual
Fixed expenses:
Advertising	$ 44,000
Rent	34,000
Salaries	170,000
Total fixed expenses	$ 248,000

Required:

6. Refer to the original data. The company is considering eliminating sales commissions entirely in its shops and increasing fixed salaries by $35,500 annually. If this change is made, what will be Shop 48's new break-even point in unit sales and dollar sales?

Note: Do not round intermediate calculations.

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