[The following information applies to the questions displayed below.]
The Fashion Shoe Company operates a chain of women's 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 company's many outlets:
Per Pair of Shoes
Selling price $ 25.00
Variable expenses:
Invoice cost $ 11.00
Sales commission 4.00
Total variable expenses $ 15.00
Annual
Fixed expenses: Advertising $ 48,000
Rent 35,000
Salaries 200.000
Total fixed expenses $ 283,000