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c vp shoe s t o r es refer to requirement 3 of exercise 8 24 required 1 calculate th 736862

C VP, shoe s t o r es.

Refer to requirement 3 of Exercise 8.24.

Required

1 Calculate the number of units sold where the operating profit under (a) a fixed salary plan, and (b) a lower fixed salary and commission plan (for salespeople only) would be equal. Above that number of units sold, one plan would be more profitable than the other; below that number of units sold, the reverse would occur.

2 Calculate the operating profit or loss under each plan in requirement 1 at sales levels of

(a) 50 000 units, and (b) 60 000 units.

3 Suppose the target operating profit is £168 000. How many units must be sold to reach the target under (a) the fixed salary plan, and (b) the lower fixed salary and commission plan?

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