Angle Silva has recently opened The Sandal Shop in Brisbane, Australa, 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: $ 26 Sales price per pair of sandals Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per year: Building rental Equipment depreciation Selling Administrative 13 $ 13 $ 3,900 6,500 3,900 11,700 Total fixed expenses $ 26,000 5. Refer to the original data. During the first year, the store sold only 3.000 palrs of sandals and reported the following operating results: Sales (3,000 pairs) Variable expenses Contribution margin Fixed expenses $ 78,008 39,000 39,e00 26,000 Net operating income $ 13,000 a. What is the store's degree of operating leverage? b. Angle is confident that with a more Intense sales effort and with a more creative advertising program she can Increase unit sales by 50% next year. Using the degree of operating leverage, what would be the expected percentage Increase in net operating Income if Angle is able to Increase unit sales by 50%? a. Degree of operating leverage b. Expected percentage increase in net operating income

Angle Silva has recently opened The Sandal Shop in Brisbane, Australa, 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: $ 26 Sales price per pair of sandals Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per year: Building rental Equipment depreciation Selling Administrative 13 $ 13 $ 3,900 6,500 3,900 11,700 Total fixed expenses $ 26,000 5. Refer to the original data. During the first year, the store sold only 3.000 palrs of sandals and reported the following operating results: Sales (3,000 pairs) Variable expenses Contribution margin Fixed expenses $ 78,008 39,000 39,e00 26,000 Net operating income $ 13,000 a. What is the store's degree of operating leverage? b. Angle is confident that with a more Intense sales effort and with a more creative advertising program she can Increase unit sales by 50% next year. Using the degree of operating leverage, what would be the expected percentage Increase in net operating Income if Angle is able to Increase unit sales by 50%? a. Degree of operating leverage b. Expected percentage increase in net operating income

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 14PB: Daisy Hernandez sells girls christening dresses through the online store, Etsy. Her customers have...

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Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. Angie has just received a degree in business and she is anxious to apply the principles she has learned to her business. In time, she hopes to open a chain of sandal shops. As a first step, she has prepared the following analysis for her new store: Sales price per pair of sandals $ 2.00 Variable expenses per pair of sandals 1.20 Contribution margin per pair of sandals $ 0.80 Fixed expenses per year: Building rental $ 9,000 Equipment depreciation 5,000 Selling 17,600 Administrative 18,000 Total fixed expenses $ 49,600
Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. Angie has just received a degree in business and she is anxious to apply the principles she has learned to her business. In time, she hopes to open a chain of sandal shops. As a first step, she has prepared the following analysis for her new store: Sales price per pair of sandals $ 2.00 Variable expenses per pair of sandals 1.20 Contribution margin per pair of sandals $ 0.80 Fixed expenses per year: Building rental $ 9,000 Equipment depreciation 5,000 Selling 17,600 Administrative 18,000 Total fixed expenses $ 49,600 Required: 1. How many pairs of sandals must be sold each year to break even? What does this represent in total dollar sales? Break-even point in unit sales pairs Break-even point in dollar sales 3. Angie has decided that she must earn at…
Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. Angie has just received a degree in business and she is anxious to apply the principles she has learned to her business. In time, she hopes to open a chain of sandal shops. As a first step, she has prepared the following analysis for her new store: Sales price per pair of sandals Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per year Building rental Equipment depreciation Selling Administrative Total fixed expenses 2.00 120 080 $ 9,000 5,000 17,600 18,000 49 600 Required: 1. How many pairs of sandals must be sold each year to break even? What does this represent in total dollar sales? pairs Break-even point in unit sales Break-even point in dollar sales 3. Angie has decided that she must eam at least $1,600 the first year to justifty her time and effort. How many pairs of sandals must be sold to reach this target profit?…
es Required information [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 Variable expenses per pair of sandals Contribution margin per pair of sandals Fixed expenses per yeart Building rental Equipment depreciation Selling Administrative Total fixed expenses Break-even point in unit sales Break-even point in dollar sales $.30 pairs 15 $ 15 $ 11,300 11,300 Required: 1. What is the break-even point in unit sales and dollar sales? (Do not round intermediate calculations.) 9,000 13,400 $ 45,000
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