Question
Hoodys for Good manufactures and sells hooded sweatshirts. The company locates its manufacturing facilities in areas with high unemployment rates and provides on-site daycare and
Hoodys for Good manufactures and sells hooded sweatshirts. The company locates its manufacturing facilities in areas with high unemployment rates and provides on-site daycare and education for its employees children. The company recently started a one for one program where they donate one sweatshirt for every one sold to an international charity to provide to a child in need. The customer pays the shipping cost for items purchased, but the company pays to ship to the international charities. Cost information is summarized below:
Variable Costs | |
Direct Materials | $4.70 per unit produced |
Direct Labor | $4.20 per unit produced |
Variable Manufacturing Overhead | $0.80 per unit produced |
Shipping | $4.70 per unit donated |
Fixed Costs | |
Salaries | $37,000 per month |
Advertising | $62,750 per month |
Production Equipment | $57,000 per month |
Answer each of the following independent questions.
If the company expects to sell 6,000 sweatshirts and donate 6,000 sweatshirts per month, what price must be charged to earn a target profit of $22,650 per month?
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