Speedy Dry Cleaning, like many dry cleaners, has a standard offer for dress shirts. If you...
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Speedy Dry Cleaning, like many dry cleaners, has a standard offer for dress shirts. If you drop your shirt off by noon, they will have it back the next day for a price of $3.50 per shirt. Because they offer the fast service, they have special contracts with their cleaning suppliers just for the shirt service. They pay $1.50 per shirt, plus a weekly fee of $80.00. 1. What is Speedy's unit contribution per shirt? 2. How many shirts does Speedy need to dry clean per week in order to break even? 3. For the past year, Speedy has averaged 50 shirts per week. How much profit are they making per week on shirts? 4. A competitor in Speedy's market just started offering next-day shirt service for $3.00 a shirt. Speedy is feeling pressure to lower their price to $3.00 to stay competitive. If Speedy lowers their price to $3.00, and their average unit sales continue to be 50 shirts per week, what will their profit be per week? 5. How many shirts per week would Speedy need to average to be profitable at $3.00 per shirt? 6. What price do you recommend Speedy charge for their shirt service in order to be more competitive but still stay profitable? Write a paragraph explaining your answer. Speedy Dry Cleaning, like many dry cleaners, has a standard offer for dress shirts. If you drop your shirt off by noon, they will have it back the next day for a price of $3.50 per shirt. Because they offer the fast service, they have special contracts with their cleaning suppliers just for the shirt service. They pay $1.50 per shirt, plus a weekly fee of $80.00. 1. What is Speedy's unit contribution per shirt? 2. How many shirts does Speedy need to dry clean per week in order to break even? 3. For the past year, Speedy has averaged 50 shirts per week. How much profit are they making per week on shirts? 4. A competitor in Speedy's market just started offering next-day shirt service for $3.00 a shirt. Speedy is feeling pressure to lower their price to $3.00 to stay competitive. If Speedy lowers their price to $3.00, and their average unit sales continue to be 50 shirts per week, what will their profit be per week? 5. How many shirts per week would Speedy need to average to be profitable at $3.00 per shirt? 6. What price do you recommend Speedy charge for their shirt service in order to be more competitive but still stay profitable? Write a paragraph explaining your answer.
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Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
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