Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You just learned about break even analysis and you are wondering how many t-shirts you have to sell in your t-shirt business to break even
You just learned about break even analysis and you are wondering how many t-shirts you have to sell in your t-shirt business to break even each month. You jot down the following information about your business: Your T-shirt business is booming. You sell creatively designed t-shirts for $20 each and you have been selling out all 500 you make each month. $10,000 a month in revenue and you are starting to think about expanding by increasing production already. You took this business class though and learned about break-even and one night you decide to see how many t-shirt you are selling above your break-even. So you write down the following financial details: 1. Each month you buy 500 blank t-shirts for a total of $1,500 delivered to your warehouse. 2. You have a month to month lease on the warehouse for $600/mo. 3. You have one employee who does all the design and t-shirt printing. He works full time for you and you pay him $2,300 a month. 4. You've been spending $500 on t-shirt ink each month to get all 500 t-shirts each month ready for sale. 6. Your other expenses (electricity, internet, phone) add up to $300 more each month. How many t-shirts do sell above your break-even number
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started