The JMSB merch store would like to offer new T-Shirts. The supplier of the shirts writes in their offer: "We calculate with direct materials for each shirt of $4 and direct labor of $8. We also add a surcharge for our fixed cost of $4 per shirt. Taxes and everything included." The JMSB merch store plans to order 200 T-Shirts and sell each for $30. Assume that all new T-Shirts could be sold as demand for JMSB gear is high. If the store wants to achieve an operating profit before tax of $5.000 by selling the new T-Shirts, it should... Question 24 Answer a. ... not include the fixed cost component in their calculations b. ... increase the selling price to $41 c. ... order and sell at least 400 shirts at the same conditions d. ... break even at 157 units e. ... negotiate a lower purchase price with the supplier of $14

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To determine the correct approach for the JMSB merch store to achieve an operating profit before tax of 5000 lets calculate the total cost per shirt a... View the full answer