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Richardo & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Richardo wants
Richardo & Sons buys T-shirts in bulk, applies its own trendsetting silk-screen designs, and then sells the T-shirts to a number of retailers. Richardo wants to be known for its trendsetting designs, and it wants every teenager to be seen in a distinctive Richardo T-shirt. Richardo presents the following data for its first two years of operations, 2019 and 2020. (Click the icon to view the data.) Read the requirements. Requirement 1. Calculate Richardo's operating income in both 2019 and 2020. 2019 Revenues Costs Direct material costs Administrative costs Total costs Operating income Enter any number in the edit fields and then click Check Answer. - X i Data Table 2019 2020 1. Number of T-shirts purchased 220,480 12,480 260,000 15,000 2. Number of T-shirts discarded Number of T-shirts sold 208,000 245,000 $ 35.00 $ 36.00 $ 20.00 $ 18.00 4. Average selling price 5. Average cost per T-shirt 6. Administrative capacity (number of customers) 7. Administrative costs 8. Administrative cost per customer 4,750 5,000 2,000,000 $ $ 1,947,500 $ 400 $ 410 Administrative costs depend on the number of customers Richardo has created capacity to support, not on the actual number of customers served. Richardo had 4,600 customers in 2019 and 4,500 customers in 2020. Print Done - X i Requirements 1. 2. Calculate Richardo's operating income in both 2019 and 2020. Calculate the growth, price-recovery, and productivity components that explain the change in operating income from 2019 to 2020. Comment on your answers in requirement 2. What does each of these components indicate? 3. Print Done
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