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 $ 40
variable expenses per pair of sandals 16
contribution margin per pair of sandals $ 24
fixed expenses per year: building rental $ 15,000
equipment depreciation 7,000
selling 20,000
administrative 18,000
total fixed expenses $ 60,000
how many pairs of sandals must of sold each year to break even? what does this represent in total sales dollars?
angie has decided that she must earn at least $18,000 the first year to justify her time and effort. how many pairs of sandals must be sold to reach this target profit?
angie now has two salespersons working in the store-- one 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 bring an additional $25,000 in sales each year. should she convert the position? use the incremental approach. (do not prepare an income statement)