Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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 $24.00 each with a minimum order of 280 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 50. Since Hooper's 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 $48.00 each. Hooper would pay the students a commission of $6.00 for each shirt sold. Required: 1. To make the project worthwhile, Hooper would require a $16,200 profit for the first three months of the venture. What level of unit sales and dollar sales would be required to reach this target net operating income? (Round your intermediate calculations to 2 decimal places.) Assume that the venture is undertaken and an order is placed for 280 sweatshirts. What would be Hooper's break-even point in unit sales and in dollar sales? (Round your intermediate calculations and final answers to the nearest whole number.)

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

Managerial Accounting

Authors: Charles E. Davis, Elizabeth Davis

2nd edition

1118548639, 9781118800713, 1118338448, 9781118548639, 1118800710, 978-1118338445

More Books

Students also viewed these Accounting questions

Question

Explain the process of MBO

Answered: 1 week ago