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 could not be returned because of the unique printing required. The sweatshirts would cost Hooper $21.00 each with a minimum order of 214 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 214. Because 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 $42.00 each. Hooper would pay the students a commission of $7.00 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $11,984? 2. Assume that Hooper places an initial order for 214 sweatshirts. What is his break-even point in unit sales and dollar sales? Note: Round your intermediate calculations, round "Break-even point in unit sales" up to the nearest whole unit and round "Break-even point in dollar sales" to the nearest whole dollar. 3. How many sweatshirts would Hooper need to sell to earn a target profit of $13,482? Note: Round final answer up to the nearest whole unit.
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 could not be returned because of the unique printing required. The sweatshirts would cost Hooper $21.00 each with a minimum order of 214 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 214. Because 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 $42.00 each. Hooper would pay the students a commission of $7.00 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $11,984? 2. Assume that Hooper places an initial order for 214 sweatshirts. What is his break-even point in unit sales and dollar sales? Note: Round your intermediate calculations, round "Break-even point in unit sales" up to the nearest whole unit and round "Break-even point in dollar sales" to the nearest whole dollar. 3. How many sweatshirts would Hooper need to sell to earn a target profit of $13,482? Note: Round final answer up to the nearest whole unit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Manji
![Problem 5-24 (Algo) Break-Even and Target Profit Analysis [LO5-4, LO5-6]
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 could not be returned
because of the unique printing required. The sweatshirts would cost Hooper $21.00 each with a minimum order of 214
sweatshirts. Any additional sweatshirts would have to be ordered in increments of 214.
Because 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
$42.00 each. Hooper would pay the students a commission of $7.00 for each shirt sold.
Required:
1. What level of unit sales and dollar sales is needed to attain a target profit of $11,984?
2. Assume that Hooper places an initial order for 214 sweatshirts. What is his break-even point in unit sales and dollar
sales?
Note: Round your intermediate calculations, round "Break-even point in unit sales" up to the nearest whole unit
and round "Break-even point in dollar sales" to the nearest whole dollar.
3. How many sweatshirts would Hooper need to sell to earn a target profit of $13,482?
Note: Round final answer up to the nearest whole unit.
1. Unit sales needed to attain the target profit
1. Dollar sales needed to attain the target profit
2. Break-even point in unit sales
2. Break-even point in dollar sales
3. Number of sweatshirts
S
667 sweatshirts
27,963
sweatshirts
sweatshirts](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbf1ef2c8-fbe2-49ff-9ab2-e24f07c3cc20%2F9bf2e2a4-d7ee-4dfc-b860-c299811b0352%2Fdd6ofky9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 5-24 (Algo) Break-Even and Target Profit Analysis [LO5-4, LO5-6]
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 could not be returned
because of the unique printing required. The sweatshirts would cost Hooper $21.00 each with a minimum order of 214
sweatshirts. Any additional sweatshirts would have to be ordered in increments of 214.
Because 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
$42.00 each. Hooper would pay the students a commission of $7.00 for each shirt sold.
Required:
1. What level of unit sales and dollar sales is needed to attain a target profit of $11,984?
2. Assume that Hooper places an initial order for 214 sweatshirts. What is his break-even point in unit sales and dollar
sales?
Note: Round your intermediate calculations, round "Break-even point in unit sales" up to the nearest whole unit
and round "Break-even point in dollar sales" to the nearest whole dollar.
3. How many sweatshirts would Hooper need to sell to earn a target profit of $13,482?
Note: Round final answer up to the nearest whole unit.
1. Unit sales needed to attain the target profit
1. Dollar sales needed to attain the target profit
2. Break-even point in unit sales
2. Break-even point in dollar sales
3. Number of sweatshirts
S
667 sweatshirts
27,963
sweatshirts
sweatshirts
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