Problem 5-24 Break-Even and Target Profit Analysis [LO5-5, LO5-6]

The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school.

These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $17.00 each with a minimum order of 200 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 50.

Since Hoopers plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $34.00 each. Hooper would pay the students a commission of $7.00 for each shirt sold.

Required:

1. What level of unit sales and dollar sales is needed to attain a target profit of $7,000?

2. Assume that Hooper places an initial order for 200 sweatshirts. What is his break-even point in unit sales and dollar sales? (Round your intermediate calculations and final answers to the nearest whole number.)

***I need to know the second part of #1, the "Dollar Sales needed to attain the target profit", All the other answers are correct.

Unit sales needed to attain the target profit	700selected answer correct	sweatshirts
	Dollar sales needed to attain the target profit	answer incorrect
2.	Break-even point in unit sales	126selected answer correct	sweatshirts
	Break-even point in dollar sales	$4,284selected answer correct

Thank you!