Loafer Dress Shoes

Loafer Dress Shoes

The loafer shoe store stocks 4 lines of ladies shoes. Please answer the 2 questions from the data below.?

Shoe type Flats- the selling price $12- variable cost$6- Sales distribution $15,000. Dress shoes- Sell price $24- var cost-$6- Sales dist-$50,000. Evening Shoes- Sell price $20-var cost $12- Sales dist $30,000. Bedrm sell price-$8-var cost $4 sales dist-$5,000. Total Fixed cost= $30,000, sales dist, total of $100,000. At the break even point, how many pairs of evening shoes can be expected to be sold? Is it 1050, 630, 315, 760, or 670. Also, which of the following is (are) true? Dress shoes provide the greatest overall amount of contribution to the store. Or both flats and bedrm shoes provide the same % of contribution. Or flats are the least valuable shoes to sell. Or the first and second statement. Or none of these.

(12-6) = 6 profit flats .........15/100 = sales proportion = 0.15
(24-6) = 18 profit dress shoes ....... 50/100 = 0.5
(20-12) = 8 = profit evening shoes .... 30/100 = 0.3
(8-4) = 4 = profit bedroom ....... 5/100 = 0.05

Total fixed cost = 30000

If N total shoes are sold then the equation below will be true at the break even point:

N(6*0.15 + 18*0.5 + 8*0.3 + 4*0.05) = 30000
N(0.9 + 9 + 2.4 + 0.2) = 30000
N(12.5) = 30000
N = 2400

So a total of 2400 pairs of shoes must be sold to break even.
0.3 of these are evening shoes = 720

Unforutnately 720 is not one of the list of possible answers but nevertheless I think it is correct.

Dress shoes provide the greatest overall contribution to the store is true.

Loafer Dress Shoes

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