Assignment Instructions/ Description
Can you please answer these question Image transcription textQuestion 1
Assignment 2
Summer 2022
Using all information provided, complete the following table. It would be easier if you set
this up in an Excel spreadsheet. When you are done, please insert it into a Word
A company produces designer shirts. The cost per shirt is:
document with your answers. You will use this table to answer Questions 2 and 3. We
$10.00
are working in dollars and cents so your answers should be in dollars and cents as well
Materials
$. 1.50
smallnomapleed aint
Packaging
(2 decimal places. (6 marks)
Design on shirt
$5.00
$3.50
Shipping and handling
gniniso!
# of
Each worker earns $15,000 annually in salary and benefits. The number of workers
workers
TVC
AVC
AFC
TC
ATC
MC
changes based on the level of production. This means this is a variable cost.
O
The artist who creates the designs for the shirts is paid $200,000 annually. Senior
2000
management are paid a total of $270,000 annually. Other annual costs are:
4000
Taxes and Insurance
$18,000
Utilities
$80,000
6000
al noleeisdue
Rent
$300.000
Bill owenA
Miscellaneous Overhead Office Expenses
$32,000
9000
13000
The following production is possible
15000
No. Of
14000
Workers
No. Of
O
2000
4000
6000
9000
13000
15000
14000
shirts that
can be
Question 2
made
What is the lowest price you would be willing to start producing this new product? Don't
round up or down. Be accurate. (1 mark)
Question 3
If you were already committed to the fixed costs, how low could the price per shirt fall
before you would consider shutting down production? Remember you have to keep
welles ion abuby il batsabated Ww aswell
paying your fixed costs whether you produce any shirts or not. If you can cover your
variable costs, then anything over that will reduce your fixed costs. You may be losing
money in the short run but you are losing less money. Don't round up or down. Be
accurate. (1 mark)... Show more