Grant\'s Western Wear is a retailer of western hats located in Atlanta, Georgia,
ID: 2461236 • Letter: G
Question
Grant's Western Wear is a retailer of western hats located in Atlanta, Georgia, Although Grant's carries numerous styles of western hats. Each hat has approximately the same price and invoice purchase cost, as shown below. Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Grant's has been great However, the business is very competitive, and Grant has relied on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other western wear stores. Also, because of the rapid growth in sales. Grant is finding it more difficult to manage certain aspects of the business such as restocking of inventory and hiring and training new salespeople. The annual breakeven point in unit sales is calculated to be: 15,000 units 14,000 units 16,000 unitsExplanation / Answer
Contribution per unit = Sales per unit- variable cost per unit
= $ 36- $ 24 = $12
Fixed Cost = $ 180000
BEP (in Units) = Fixed cost/ Contribution per unit = 180000/12 = 15000 units
Therefore Answer will be A. 15000.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.