Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stan Soper has a 600-square-foot T-shirt store in a good mall location. He has all colors and sizes plus hundreds of designs for heat-embossing onto

image text in transcribed
Stan Soper has a 600-square-foot T-shirt store in a good mall location. He has all colors and sizes plus hundreds of designs for heat-embossing onto the shirts. Every shirt sells for $10. In his area, Stan estimates he has about a steady 12 percent share of a 100,000- units-per-year customized T-shirt market. Stan has found this to be a nonseasonal business. Sales hardly vary from one month to the next. Stan's costs are: Store lease $1,400 a month T-shirts $4 each Embossing decals Embossing equipment Store fixtures Telephone, postage, etc. $.50 each $24,000 (10 yr lease at $200 per month) $14,400 (10 yr lease at $120 per month) $125 per month Stan's advertising budget is $200 per month. He pays one store assistant $1,040 a month and draws a salary for himself of $1,300 a month. His waste (T-shirts spoiled by a poor or misapplied decal) runs around 2 percent of a T-shirt's variable cost. What market share does Stan need to break even? Group of answer choices 3.73% 4.25% 9.73% 32.5% None of the above

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Carl S. Warren, James M. Reeve, Philip E. Fess

20th Edition

0324025424, 978-0324025422

More Books

Students also viewed these Accounting questions

Question

What are the short- and long-term effects of stress on the body?

Answered: 1 week ago

Question

Whats My Comfort with Change?

Answered: 1 week ago