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ACCT 386 - Week 3 - Homework - Question 3

ACCT 386 - Week 3 - Homework - Question 3
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ACCT 386 - Week 3 - Homework - Question 3

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Question 3

Shirts Unlimited operates a chain of shirt stores that carry many styles of shirts that are all sold at the same price. To encourage sales personnel to be aggressive in their sales efforts, the company pays a substantial sales commission on each shirt sold. Sales personnel also receive a small basic salary.

 

The following worksheet contains cost and revenue data for Store 36. These data are typical of the company's many outlets:

 

Per Shirt

  Selling price

$

52.00   

 





  Variable expenses:

 

 

     Invoice cost

$

24.00   

     Sales commission

 

9.40   

 



       Total variable expenses

$

33.40   

 





 

 

Annual

  Fixed expenses:

 

 

     Rent

$

182,280   

     Advertising

 

96,140   

     Salaries

 

86,140   

 



       Total fixed expenses

$

364,560   

 






     The company has asked you, as a member of its planning group, to assist in some basic analysis of
its stores and company policies.