Fig. D-25 0.20 Calculations (and related business constraints) are discussed next. Your minimum return on sales (net income divided by total revenue) is.20. You have a limited amount of cotton and buttons. Use of each resource must be calcu- lated, then used in constraints. You think you must make at least 2 million T-shirts and at least 2 million button-down shirts. You want to be known as a balanced shirt maker, so you think the ratio of button-downs to T-shirts should be no greater than 4:1. (Thus, if 9 million button- down shirts and 2 million T-shirts were produced, the ratio would be too high.) Income Statement Your spreadsheet should have this income statement skeleton: Tutorial ME + 29: Income Statement: 30. T-Shirt Revenue 31 Button-Down Revenue 32 Total Revenue 155 Variable costs: T-Shirts 134 Variable costs: Button Downs 35. Total Costs 36. Pre-Tax Revenue 37. Income Tax Expense .38 Net Income Fig. D-26 The Solver's target is net income, which must be maximized. You can use this table to write out your constraints before entering them into the Solver. Solver Constraints Excel Expression Expression in English > Net income to revenue Ratio of BDs to Ts Minimum T-shirts Minimum Button Downs Usage of buttons Usage of cotton Fig. D-27 Enter your calculations and income statement formulas. Enter the constraints. Run the Solver to get an answer to the production problem. Fig. D-25 0.20 Calculations (and related business constraints) are discussed next. Your minimum return on sales (net income divided by total revenue) is.20. You have a limited amount of cotton and buttons. Use of each resource must be calcu- lated, then used in constraints. You think you must make at least 2 million T-shirts and at least 2 million button-down shirts. You want to be known as a balanced shirt maker, so you think the ratio of button-downs to T-shirts should be no greater than 4:1. (Thus, if 9 million button- down shirts and 2 million T-shirts were produced, the ratio would be too high.) Income Statement Your spreadsheet should have this income statement skeleton: Tutorial ME + 29: Income Statement: 30. T-Shirt Revenue 31 Button-Down Revenue 32 Total Revenue 155 Variable costs: T-Shirts 134 Variable costs: Button Downs 35. Total Costs 36. Pre-Tax Revenue 37. Income Tax Expense .38 Net Income Fig. D-26 The Solver's target is net income, which must be maximized. You can use this table to write out your constraints before entering them into the Solver. Solver Constraints Excel Expression Expression in English > Net income to revenue Ratio of BDs to Ts Minimum T-shirts Minimum Button Downs Usage of buttons Usage of cotton Fig. D-27 Enter your calculations and income statement formulas. Enter the constraints. Run the Solver to get an answer to the production