Question
London Fox Corporation produces and sells designer sport shirts. Each shirt is sold for $97. Producing one shirt requires the following: 5 yards of raw
London Fox Corporation produces and sells designer sport shirts. Each shirt is sold for $97. Producing one shirt requires the following: 5 yards of raw materials and 3 hours of direct labor. Each yard of raw materials costs $4.00, and the company pays $9.00 per direct labor hour. The company has the following additional costs: Fixed supervisory and factory administrative costs of $80,000 per month, the company rents its factory manufacturing facility on a 10-year lease for $50,000 per month. Based on the information given answer the following questions: If the management of the company plans to earn a monthly gross profit of $80,000, how many shirts the company must produce and sell to achieve the profit target:
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