2 Considering that all the variable from "Decision Making - Case 1", Cougar Inc. can make an additional 2,500 shirts by adding $10,000 in fixed costs The following represents the sales and costs in a normal month, including the extra for making more t-shirts Normal Capacity of the factory T-shirts per month 20,000 5 Additional Capacity 2500 T Shirts sold in a normal month 18,000 Selling Price of T-shirts 40 00 Cost to Cougar Inc of each shirt (material & labor) 25 00 Monthly fixed costs for employees to produce the shirts (COG) $ 25,000 00 Monthly fixed costs for rent, utilities, accountants, etc $ 45,000 00 Fixed Costs for making an additional 2,500 T-Shirts $ 10,000 00 Again, Longhorn Lid. wants Cougar Inc. to sell them 5,000 T-shirts in December, but they only want to pay $30 per T-shirt 14 T-shirts sold to Longhorn Lid in December 5,000 150000 15 Longhorn Lid offers to pay (per shirt) $ 30.00 16 QUESTION Should Cougar Inc. sell Longhorn Lid. the T-shirts? How much would they gain or lose by taking this deal? Remember that if they sell the T-shirts to Longhorn Ltd. for $30, they cannot sell them to 17 UH fans for $40 18 19 Create an income statement for Cougar Inc. doing business as normal, THEN create one for if they accept Longhorn Lid's proposal 20 THEN calculate how much Cougar Inc would make or lose by accepting the offer BE SURE YOU DO ALL 3 PARTS and Show your Work 21 Partial credit will be awarded if I can figure out you are on the right track 22 23 24 25 At Normal Capacity Effect of Acce 26 Sales 18000 27 selling price per unit 40 28 29 Sales 720,000 30