ACCT20076, Term 3, 2015 Assignment 1
CVP Anaysis – 40 Marks (The marks will be weighted down to 20 marks)
The DC Shoe Company operates a chain of shoe stores that sell 10 different styles of inexpensive men’s
shoes with identical unit costs and selling prices. A unit is defined as a pair of shoes. Each store has a
store manager who is paid a fixed salary. Individual salespeople receive a fixed salary and a sales com mission. DC is considering opening another store that is expected to have the revenue and cost relationships shown here:
Unit Variable Data (per pair of shoes)
Selling Price
\$ 35.00
Annual Fixed Cost
Rent
\$
77,000
Salaries
\$
262,000
Cost of Shoes
\$ 23.20
\$
86,000
Sales Commission
\$
Other fixed costs
\$
36,000
Variable Cost Per Unit
\$ 25.00
Total fixed costs
\$
461,000
1.80
Required: (Consider each question independently)
1. Define cost-volume-profit (CVP) analysis and outline four assumptions underlying CVP. (5 Marks) What
is the annual breakeven point in (a) units sold and (b) revenues? (3 Marks)
2. If 60,000 units are sold, what will be the store’s operating income (loss)? (8 Marks)
3. If sales commissions are discontinued and fixed salaries are raised by a total of \$75,000, what would be
the annual breakeven point in (a) units sold and (b) revenues? (8 Marks)
4. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of
\$0.35 per unit sold, what would be the annual breakeven point in (a) units sold and (b) revenues? (8
Marks)
5. Refer to the original data. If, in addition to his fixed salary, the store manager is paid a commission of
\$0.35 per unit in excess of the breakeven point, what would be the store’s operating income if 60,000 units
were sold? (8 Marks)

## I need help with my homework...

Environmental Science Sustainable...

## ACC 349 Cost Accounting Week 3 Team Assignment...

Weekly ReflectionDiscuss this week’s objectives with your team. Your discussion should include the topi...

## HWAnswers 0Bids 47Other questions 10...

Write a report in a question and answer format with the following elements:Executive Summary: An effective executive summary is a short descripti...

## take Simple Boolean Algebra Test...

Explore the underlying structure that unites Logic and Set Theory. Outline • Read Chapter 9 Research:Boolean Algebra •...

## CIS 500 Case Study 1 The Big Data Challenges...

CIS 500 Case Study 1 The Big Data Challenges...

## CMR 244 Module 3 Assignment Answers 2Bids 52Other...

InstructionsNow that you have selected a company, it’s time to select a country to enter. The assignment is to write a one-to-two page overview o...

## Students must post one interesting case that he/sh...

Students must post one interesting case that he/she has seen in the clinical The case should be an unusual diagnosis, or a complex case that requir...

## Help....

I have homework story summary....

## Appellate courts normally see only written transcr...

Appellate courts normally see only written transcripts of trial proceedings when they are reviewing cases. Today, in some states, videotapes are...

I would like a paraphrase for the summary linked below.http://lucchesi-sp13.wikid...

### Other samples, services and questions:

Calculate Price

When you use PaperHelp, you save one valuable — TIME

You can spend it for more important things than paper writing.

Approx. price
\$65
Order a paper. Study better. Sleep tight. Calculate Price!
Calculate Price
Approx. price
\$65