[The following information applies to the questions displayed below.] Angie Silva has recently...
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[The following information applies to the questions displayed below.]
Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. In time, she hopes to open a chain of sandal shops. As a first step, she has gathered the following data for her new store:
| Sales price per pair of sandals | $ | 34 |
| Variable expenses per pair of sandals | 17 | |
| Contribution margin per pair of sandals | $ | 17 |
| Fixed expenses per year: | ||
| Building rental | $ | 12,800 |
| Equipment depreciation | 12,800 | |
| Selling | 10,200 | |
| Administrative | 15,200 | |
| Total fixed expenses | $ | 51,000 |
4. Angie now has two salespersons working in the storeone full time and one part time. It will cost her an additional $8,000 per year to convert the part-time position to a full-time position. Angie believes that the change would increase annual sales by $40,800. Should she convert the position? Use the incremental approach.
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