Fit Appare (BA) sells high -quelity workout dothing across Canada and the Vained States. FiA is a private compary owned by two sisterk. Trina and Cora Smith. Ten years ago, the adaters decided to turn their lives aroand and get beathy. This imolved a strict eating plan and an even stricter workout regimen. One thing that they both found motivating was feeling gond at the gym. including wearing stylish cothes. The riters decided to begin mandacturing and selling premium - priced wrotkout appard to both men and woenen. Affer maty bumps along the rood, 10 year later FA operates as a succesfal and extremely profitable busines. Fit Apparel doeunt have physical stotes. You must porchase the clothing from an independent censal tant. The independent consultants are experts on the product and ate very passionate about what they do. It is the role of the independent consultant to market the product. The most common way that this is done is uxually by hosting in bome parties. The conualtant will visit a customer's bome, and showease the lop-selling appard items to a groap of friends. There are many different incentives for the consaltants, which make their job very lucrative over 80% of the consultants earn more than $130.000 per year. FA has been clear with the independent consultants that the company will never directly compete with them for sales. The clothing is of premium quality and is priced at a premium amount. The top-selling products include hooded sweatihirts and workout tops. pants, and shorts. Orher items that broaden the prodact range include items such as water bottles, body wash, and running shoes. A typical cuttomer of FA is a woman between the ages of 25 and 45 . She lores to be outdoots and lores to exercise. Being bealhhy is important to ber and the is at peace with berself. She has always felt the need to belong in group metuings and loves to shop. All clothing is priced at total cost plus 60%. The pricing is very high and makes the products "exclusive. Not everyone can afford to be part of the FA "club". No item ever goes on ale. If a product doent sell it goes to waste. The two sisters have attributed their saccess to finding a way to make people feel good about themselves. If something makes a perion feel good, they ate often willing to pay more money. The FA manufacturing plant currently has capacity to use about 5 million machine bours. It is currently using about 3 million machine hour. FA has been approached by a well-recogaized national charity that supports womenis health. The chatity has aaked FA to manufecture I million cycling jerneys foe its anatal cycling event. The event requires each participant to ratse 52,000 in order to be cligible to ride their bike from one destination to another. Each par: ticipant muit also purchase the cycling jericy. The charity has saggested that each participant mill pay $30 for a jeney. This represents a fraction of the retail selling price of $75 (see Exhibit 1). Although FA currently manufactures cycling jerweys, the sisters ate not sure if they should accept this offer. In order to manufacture the jersen. FA would bave to purchase a sereen prist machine that woold cost 5200.000 and incur 525,000 of set-up costs. Because of the screen printing, these cuatom jerseys would require an additional 025 labour hours and 0.5 machise hours eich. Required The sisters decided they nceded the help of an eapert and have engaged you, a profesilonal accountant, for advice. They have provided you with the current cost so manafactare a simular jetser (Exhlibit 1). They have asked you to prepare a report that outlines whether or not they should accept this ope-tine ordee They worild like yoa to consider both qualitative and qoantitative factors. Prepare the report for the owners of FL
