Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed


b Breakeven point in revenues = £30 × 42,000 = £1,260,000 4



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b
Breakeven point in revenues = £30 × 42,000 = £1,260,000
4
Fixed costs = £360,000 Contribution margin per pair = £8.70
a
£360,000
Breakeven point in units =
= 41,380 pairs
£8.70
b
Breakeven point in revenues = £30 × 41,380 = £1,241,400


Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
5
Breakeven point = 40,000 pairs Store manager receives commission on 10,000 pairs Cost of commission = £0.30 × 10,000 = £3,000 Revenues, £30 × £50,000
£1,500,000 Variable costs
Cost of shoes Salespeople commission
Manager commission
3,000 1,053,000 Contribution margin
447,000 Fixed costs
360,000 Operating income
£87,000 An alternative approach is 10,000 units × £8.70 = £87,000

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