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Analyze the following three options and preform a Break-Even analysis for each using the contribution margin method for Karl's T-shirt Company. Option 1 9 9

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Analyze the following three options and preform a Break-Even analysis for each using the contribution margin method for Karl's T-shirt Company. Option 1 9 9 9 Option 1 is to import the finished goods internationally for sale domestically in a retail outlet, this option requires a very high minimum purchase order (250,000 Units) however has the advantage of a lower per unit cost and lower fixed costs. This plan has the following costs and revenue associated: volume (units) : 250,000 Selling Price Per unit: $11.99 Unit Variable Cost: $9.50 Fixed Costs:$255,000 Depreciation: $5,000 Option 2 This option requires the purchase of a textile machine that can produce fabrics with a higher thread count. Unfinished goods are imported internationally in form of threads and then processed for final sale domestically. It will require an additional investment of $200,000 compared to option 1 but has the advantage of higher quality goods and as such will sell for a higher price. This plan has the following costs and revenue associated: Volume (units) : 180,000 Selling Price Per unit: $25.00 Unit Variable Cost: $21.00 Fixed Costs:$455,000 Depreciation: $10,000 Option 3 The last option is to sell custom T-shirts that are made-to-order. This option requires the highest fixed costs because It requires a printing machine to print custom labels or designs for customers. Variable costs for this option are low compared to other options and has the advantage of charging a premium for the shirts being custom and "made-to-order". This plan has the following costs and revenue associated: Volume (units) : 80,000 Selling Price Per unit: $35.00 Unit Variable Cost: $15.00 Fixed Costs:$1,200,000.00 Depreciation: $40,000 Which Option would you choose for the short term? What about for the long term? Why? You may Input your answer below

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