Pretax Breakeven Point Assignment, You are the owner of a general retail-clothing store. Below is the income statement for last year which is not expected to change at all during the upcoming fiscal year. You have one full time manager, two three quarter time assistant managers and 3 part time clerks. You have had the manager and assistant managers for the past five years. Five years ago sales were only 350,000 dollars. As sales have increased you have added the part time clerks. You anticipate adding more clerks as sales increase in the future. You pay you credit card vendor 1 percent of sales. Bad debt expense and shrinkage are also estimated as a percentage of sales. The Mall common area payment must be paid regardless of how many sales you make
1. Please calculate the pretax breakeven point in sales dollars from the formula in the online lecture on breakeven analysis. Use the formula for breakeven sales dollars. Do not use the formula for breakeven in units. As part of this analysis list each expense item and identify whether it is a fixed or a variable expense. (20 points)
2. What happens to your breakeven point if your primary supplier of clothing raises prices 5%? You buy 45% of your clothing from this company. (10 points)
3. Your manager has received an offer of employment from a competitor. She would make 25% more than you are paying her now. If you match this offer, what is the impact upon your breakeven point (what will the new breakeven point be)? (10 points)
Please show the calculations with your answers. Helphub Online Tutoring
First step: Determine which expense items are fixed and which are variable. I do not expect you to make the same assumptions I would make. You are graded on the application of the breakeven formula to the data as you have analyzed it.
Second Step: Calculate the breakeven sales using the formula in the online lecture.
Third Step: Do a “what if” analysis by changing the inputs (in problem 2 and 3) and recalculating the breakeven sales.
Managers’s Salaries & Benefits 25,000
Asst. Managers’ Wages 35,000
Clerical Wages 29,000
Owner’s Salary 55,000
Rent (4% of gross revenue) 13,000
Mall Common Area Payment 25,000
Phone Bill 5,000
Property Insurance 7,000
Property Taxes 5,000
Office Supplies 2,000
Equipment Expenses 5,000
Bad Debt Expense 15,000
Credit Card Expense 6.500
Wholesale Clothing Purchases 380,000
Total Expenses 612,000
Net Operating Income 38,000 .. Get Finance homework help today
Why Choose HelpHub
Quality Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
We have hired a team of professional writers experienced in academic and business writing. Most of them are native speakers and PhD holders able to take care of any assignment you need help with.
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account.
On Time Delivery
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. We will always strive to deliver on time.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text.
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
HelpHub Writing Services
No need to work on essay at night. Sleep tight, we will cover your back. We offer all kinds of essay writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied.