Winfield Company operates a retail store a Below is a table

Winfield Company operates a retail store

a)	Below is a table containing monthly sales and sales staff compensation, in dollars for the previous year. Use the high-low method to create an equation in the form Y = a+ bX to describe
	the behavior of sales staff compensation.

	Month	Comp	Sales
	1	412,700	1,808,000
	2	386,000	1,659,000
	3	359,700	1,512,000
	4	346,500	1,138,000
	5	359,400	1,218,900
	6	341,000	1,233,000
	7	366,500	1,409,300
	8	364,200	1,437,000
	9	400,100	1,616,600
	10	443,000	1,833,000
	11	432,900	1,858,000
	12	409,600	1,735,000

b)	Other information:
	Store rent expense is $70,000 / month
	Utilites on average amount to 5% of sales staff compensation
	Management staff, in aggregate, are paid $10,000 / month plus 2% of sales
	Cost of goods sold is typically 58% of sales
	Miscellaneous expenses are $1,000 / month

	Given these data, determine the forecast net profit of the store at sales of $2,000,000 for the month


c)	Identify at least two potential weaknesses in your profit forecast. (Limit 100 words)

Winfield Company operates a retail store

a)	Below is a table containing monthly sales and sales staff compensation, in dollars for the previous year. Use the high-low method to create an equation in the form Y = a+ bX to describe
	the behavior of sales staff compensation.

	Month	Comp	Sales
	1	412,700	1,808,000
	2	386,000	1,659,000
	3	359,700	1,512,000
	4	346,500	1,138,000
	5	359,400	1,218,900
	6	341,000	1,233,000
	7	366,500	1,409,300
	8	364,200	1,437,000
	9	400,100	1,616,600
	10	443,000	1,833,000
	11	432,900	1,858,000
	12	409,600	1,735,000

b)	Other information:
	Store rent expense is $70,000 / month
	Utilites on average amount to 5% of sales staff compensation
	Management staff, in aggregate, are paid $10,000 / month plus 2% of sales
	Cost of goods sold is typically 58% of sales
	Miscellaneous expenses are $1,000 / month

	Given these data, determine the forecast net profit of the store at sales of $2,000,000 for the month


c)	Identify at least two potential weaknesses in your profit forecast. (Limit 100 words)

c) Two potential weaknesses

1.Utilities which is calculated on average amount to 5% of sales staff compensation might be inaccurate as it is kind of fixed expenses.

2.Management staff expenses should not be based on % of sales.