SportShirt is a local company that custom-prints tech running shirts for organized racing events. The company has bee in business for 2 years. Normal demand for the tech running shirts is approximately 550 shirts per event. On average, there are two events per month. The company has the following direct costs per shirt: (Click the icon to view the direct costs per shirt.) The company has historically estimated selling price based on the direct cost of providing the tech shirts. Prices reflected a 40% desired profit margin above direct costs. Recently, SportShirt has experienced lower-than-normal profits and suspects that the prices it is charging are not covering all costs (direct and indirect) of providing the tech shirts. Indirect costs of the company include depreciation on the printing machines and utilities. The following data from the most recent year relate to these indirect costs: (Click the icon to view the indirect costs.) The management accountant estimates the following regression equation with utilities as the dependent variable and the number of tech shirts as the independent variable: y=$466+$1.43x in business for 2 years. Normal demand for the tech running shirts is approximately 550 shirts per event. On average, there are two events per month. The company has the following direct costs per shirt: (Click the icon to view the direct costs per shirt.) The company has historically estimated selling price based on the direct cost of providing the tech shirts. Prices reflected a 40% desired profit margin above direct costs. Recently, SportShirt has experienced lower-than-normal profits Requirement 1. If monthly sales are 1,100 tech shirts, what is the full cost per tech shirt? (Round all currency amounts to the nearest cent.) experiencing lower-than-normal profits? (Round any interim currency the profit margin percentage to the nearest whole percent, X%.) % profit margin on each tech shirt sold. rrtShirt has not been aware of how the costs have been affecting on 40% markup of direct costs has been in recovering all costs tech shirts. Requirement 1. If monthly sales are 1,100 tech shirts, what is the full cost per tech shirt? (Round all currency amoun to the nearest cent.) Requirement 2. Why has SportShirt been experiencing lower-than-normal profits? (Round any interim currency calculations to the nearest cent and enter the profit margin percentage to the nearest whole percent, X\%.) SportShirt has only been earning a(n) \% profit margin on each tech shirt sold. Profits are lower than normal because SportShirt has not been aware of how the costs have been affecting overall profits. The decision to base prices on 40% markup of direct costs has been in recovering all costs plus desired profits related to providing the tech shirts. Requirement 2. Why has SportShirt been experiencing lower-than-normal profits? (Round any interim currency calculations to the nearest cent and enter the profit margin percentage to the nearest whole percent, X%.) SportShirt has only been earning a(n) % profit margin on each tech shirt sold. Profits are lower than normal because SportShirt has not been aware of how the costs have been affecting overall profits. The decision to bast prices on 40% markup of direct costs has been in recovering all costs plus desired profits related to providing the tech shirts. Requirement 3. What price must SportShit charge to recover all costs and eam a 25\% margin en all salen? (Round to the nearest cent.) Sportshin must charge 5 to toam a 25% margin on al sates. Requirement 4. What implications will a poterfial price increase have on SpertShit andior its customers? Hiow might the owners address any negative reactions from customers? II Sportshirt increases its price, they Data table ies as the shirt? (Roun (Round any inter st whole percent. ortShirt is a local company that custom-prints tech running shirts for organized racing even business for 2 years. Normal demand for the tech running shirts is approximately 550 shirts ere are two events per month. The company has the following direct costs per shirt: (Click the icon to view the direct costs per shirt.) ect cost of providing the ortShirt has experienced Data table firect and indirect) of prov chines and utilities. The fo tion with utilities as the de cost per tech shirt? (Round Total full cost per tech shirt Requirement 2. Why has SportShirt been experiencing lower-than-normal profits? (Round any inter calculations to the nearest cent and enter the profit margin percentage to the nearest whole percent
