Question

The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner,...

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 they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $8 each with a minimum order of 75 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 75. Since 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 $13.50 each. Hooper would pay the students a commission of $1.50 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $1,200? 2. Assume that Hooper places an initial order for 75 sweatshirts. What is his break-even point in unit sales and dollar sales?

Homework Answers

Answer #1

Solution-

1)

Selling price of sweatshirts per unit $13.50
Less :- Cost of sweatshirts per unit $8.00
Less :- Commissions $1.50
Contribution per unit $4.00

Target profit = $1200

Unit sales needed to attain the target profit = [1200 / 4]

= 300 units

Dollar sales needed to attain the target profit = [300 units * $13.50]

= $4050

2) Break even point in unit sales = [Fixed costs / Contribution margin per unit]

= [(75 * 8 ) / (13.50 - 1.50)]

= [600 / 12]

= 50

Break even point in dollar sales = 50 * $13.50

= $675

Ans :-

1. Unit sales needed to attain the target profit 300 Sweatshirts
Dollar sales needed to attain the target profit $4050
2. Break-even point in unit sales 50 Sweatshirts
Break-even point in dollar sales $675

  

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner,...
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 they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $8 each with a minimum...
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner,...
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 they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $8 each with a minimum...
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner,...
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 they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $18.00 each with a minimum...
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner,...
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 they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $17.00 each with a minimum...
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner,...
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 they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $24.00 each with a minimum...
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner,...
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 they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $17.00 each with a minimum...
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner,...
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 they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $21.00 each with a minimum...
We constantly seem to be pricing ourselves out of some markets and not charging enough in...
We constantly seem to be pricing ourselves out of some markets and not charging enough in others. Our pricing policy is pretty simple: we mark up our full manufacturing cost by 50%. That means a computer that costs us $2,000 to manufacture will sell for $3,000. Until now I thought this was a workable approach, but now I’m not so sure. Steve Works, CEO, Cortland Manufacturing, Inc. (CMI) Steve’s Controller, Sally Nomer, had just told him that she believed the...
Review the Robatelli's Pizzeria Case Study. Develop another internal controls system, but this time, in the...
Review the Robatelli's Pizzeria Case Study. Develop another internal controls system, but this time, in the purchases and fixed assets business areas. Prepare a 12- to 16-slide presentation describing the purchases and fixed assets business areas. Be sure to incorporate speaker notes as well as appropriate visuals, graphics, fonts, etc. Include any associated risk in these areas. Describe specific internal controls that include authorization of transactions, segregation of duties, adequate records and documentation, security of assets, and independent checks and...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary rivals? How will the acquisition of Reebok by Adidas impact the structure of the athletic shoe industry? Is this likely to be favorable or unfavorable for New Balance? 2- What issues does New Balance management need to address? 3-What recommendations would you make to New Balance Management? What does New Balance need to do to continue to be successful? Should management continue to invest...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • The following sample observations were randomly selected. (Round intermediate calculations and final answers to 2 decimal...
    asked 10 minutes ago
  • what type of graph is best suitable for data obtained from customer ratings. The ratings are...
    asked 13 minutes ago
  • Determine the cumulative 15-year 18 kip ESAL’s in the design lane for 2-lane highway for the...
    asked 21 minutes ago
  • Q: Dr.Grimace, the evil dentist, is trying to find out if his patients suffer from periodontal...
    asked 21 minutes ago
  • After collecting data on 19283 dogs, you find that male vallhunds have an average weight of...
    asked 23 minutes ago
  • Research Target Corporation and assess your satisfaction with the company you researched and make recommendations about...
    asked 24 minutes ago
  • Evidence suggests that 70% of FSU students like turtles. Suppose we randomly sampled 15 FSU students....
    asked 24 minutes ago
  • Ulrich challenges the appropriateness of the nearly universal symbolism of the spinning wheel as the marker...
    asked 25 minutes ago
  • Differential Equations: Please try to computer type, if not possible be clear and organize. Thank you...
    asked 25 minutes ago
  • In your opinion, what are the three (3) most important benefits an employer can give to...
    asked 30 minutes ago
  • In a test of the effectiveness of garlic for lowering​ cholesterol, 81 subjects were treated with...
    asked 33 minutes ago
  • How does the 95% confidence interval correspond to the reported conclusion at a 0.05 significance level?...
    asked 34 minutes ago