The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner,...
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The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance and could not be returned because of the unique printing required. The sweatshirts would cost Hooper $24.00 each with a minimum order of 187 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 187. Because Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $48.00 each. Hooper would pay the students a commission of $6.00 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $13,464? 2. Assume that Hooper places an initial order for 187 sweatshirts. What is his break-even point in unit sales and dollar sales? Note: Round your intermediate calculations, round "Break-even point in unit sales" up to the nearest whole unit and round "Break-even point in dollar sales" to the nearest whole dollar. 3. How many sweatshirts would Hooper need to sell to earn a target profit of $15,147? Note: Round final answer up to the nearest whole unit. 1. Unit sales needed to attain the target profit 1. Dollar sales needed to attain the target profit $ 748 sweatshirts 35,904 2. Break-even point in unit sales 2,312 sweatshirts 2. Break-even point in dollar sales 3. Number of sweatshirts $ 111,072 2,312 sweatshirts The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance and could not be returned because of the unique printing required. The sweatshirts would cost Hooper $24.00 each with a minimum order of 187 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 187. Because Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $48.00 each. Hooper would pay the students a commission of $6.00 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $13,464? 2. Assume that Hooper places an initial order for 187 sweatshirts. What is his break-even point in unit sales and dollar sales? Note: Round your intermediate calculations, round "Break-even point in unit sales" up to the nearest whole unit and round "Break-even point in dollar sales" to the nearest whole dollar. 3. How many sweatshirts would Hooper need to sell to earn a target profit of $15,147? Note: Round final answer up to the nearest whole unit. 1. Unit sales needed to attain the target profit 1. Dollar sales needed to attain the target profit $ 748 sweatshirts 35,904 2. Break-even point in unit sales 2,312 sweatshirts 2. Break-even point in dollar sales 3. Number of sweatshirts $ 111,072 2,312 sweatshirts
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To solve this problem we need to find the unit sales and dollar sales required to attain the target ... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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