Garner Stores, Inc. is a multiple-store chain retailer of women's clothing. You are provided with the following budgeted income statement for the coming year. Required:
1. Determine the breakeven point in dollars for 2013.
2. What is the required sales dollars if desired profit is to increase by 10% over the budgeted pre-tax profit?
3. What is the indifference point between reducing the commissions to 10% of sales dollars, and at the same time increasing sales salaries by $2.4 million, relative to the current budget?

Question

Garner Stores, Inc. is a multiple-store chain retailer of women's clothing. You are provided with the following budgeted income statement for the coming year.  Required:
1. Determine the breakeven point in dollars for 2013.
2. What is the required sales dollars if desired profit is to increase by 10% over the budgeted pre-tax profit?
3. What is the indifference point between reducing the commissions to 10% of sales dollars, and at the same time increasing sales salaries by $2.4 million, relative to the current budget?

Quizplus · Accepted Answer

The Answer of Garner Stores, Inc. is a multiple-store chain retailer of women's clothing. You are provided with the following budgeted income statement for the coming year.  Required:
1. Determine the breakeven point in dollars for 2013.
2. What is the required sales dollars if desired profit is to increase by 10% over the budgeted pre-tax profit?
3. What is the indifference point between reducing the commissions to 10% of sales dollars, and at the same time increasing sales salaries by $2.4 million, relative to the current budget?