Assignment7FacultyLabVersion

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Faculty labs only version - Pearson Interactive Computer Assignments Assignment 7: Cost-Volume-Profit Analysis Registered User: Yang Xu Student Number: 307198650 -------------------------- Original Data -------------------------- Selling price $54.00 ----------------- Changed Data for Requirements 2-5 ---------------- Cost of shoes (variable) $35.10 Requirement 2 (specific sales volume) 63,000 units Sales commissions per unit (5% of price) $2.70 Requirement 3 (increase in fixed salaries) $145,000 Fixed rent $108,000 Requirements 4 & 5 (store manager's commission) $0.54 per unit Fixed salaries $360,000 Requirement 5 (sales w/ new compensation scheme) 90,000 units Fixed advertising $144,000 Other fixed costs $20,000 Theoretically the breakeven point should be rounded up to the next whole number of units but the marking program doesn't require you to do so. Required 1: Calculate the following amounts using the original data. Contribution margin per pair $16.20 Contribution margin ratio 30.0% (a) Breakeven point in units 39,012 (b) Breakeven point in sales dollars $2,106,667 Required 2: If 63,000 units are sold, calculate the operating income (loss) ?
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