Refer to Exercise 13-21.

Data From Exercise 13-21

Dominic & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Dominic wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Dominic T-shirt. Dominic presents the following data for its first 2 years of operations, 2019 and 2020.

Required

1. Calculate the amount and cost of unused administrative capacity at the beginning of 2020, based on the actual number of customers Dominic served in 2020.
2. Suppose Dominic can only add or reduce administrative capacity in increments of 250 customers. What is the maximum amount of costs that Dominic can save in 2020 by downsizing administrative capacity?
3. What factors, other than cost, should Dominic consider before it downsizes administrative capacity?

Transcribed Image Text:

1. Number of T-shirts purchased 2. Number of T-shirts discarded 3. Number of T-shirts sold (row 1 - row 2) 4. Average selling price 5. Average cost per T-shirt 6. Administrative capacity (number of customers) 7. Administrative costs 8. Administrative cost per customer (row 7, row 6) 2019 $ $ 225,500 20,500 205,000 32.00 17.00 4,700 $1,739,000 $ 370 2020 ssss $ 33.00 15.00 4,450 $1,691,000 S 380 257,000 24,000 233,000 $