Nielsen's fine clothing store do this problem in excel.
you are the owner of a general retail clothing store. below is the income statement for last year which is not expected to change at all during the upcoming fiscal year. you have one full time manager, two three quarter time assistant managers and 3 part time clerks. you have had the manager and assistant managers for the past five years. five years ago sales were only 350,000 dollars. as sales have increased you have added the part time clerks. you anticipate adding more clerks as sales increase in the future. you pay you credit card vendor 1 percent of sales. bad debt expense and shrinkage are also estimated as a percentage of sales. the mall common area payment must be paid regardless of how many sales you make. in addition, your ex-husband must get paid alimony and child support each month (which you pay from the owner's salary).
1. calculate the pretax breakeven point from the formula in the online lecture on breakeven analysis. (20 points)
2. what happens to your breakeven point if your primary supplier of clothing raises prices 5%? you buy 45% of your clothing from this company. (10 points)
3. your manager has received an offer of employment from a competitor. she would make 25% more than you are paying her now. if you match this offer, what is the impact upon your breakeven point (what will the new breakeven point be) ? (10 points)