The Tech Student Government Association (SGA) is selling t-shirts to create an "orange effect" for the football game (Tech's school color is orange). The club's financial goal is to make a profit of $150,000, but in order to have a large number of fans buy the shirts and wear them, it doesn't want to price the t-shirts much more than $6. The SGA would like to sell approximately 45,000 orange t-shirts to achieve the desired orange effect, which it's relatively confident it can do. It will cost $100,000 to purchase, screen print and ship this many t-shirts. The SGA sells the shirts through 3 sources: online, two college bookstores, and a local independent bookstore. While the bookstores don't want a share in the profit, they do expect their direct costs to be covered, including labor, space and other costs. The two Tech bookstores charge the SGA $0.35 per shirt, and the local independent store charges $0.50 per shirt. The cost per sale online (including shipping, handling, and packaging) is $2.30 per shirt. The SGA estimates that it will sell 50% of the shirts at the two college bookstores, 35% at the local bookstore, and 15% online. Using Excel worksheet: a. If the SGA sells the t-shirts for $6 and if it sells all the shirts it orders, will it make enough profits to achieve its financial goal? b. If not, at what price would the SGA need to sell the t-shirts, or how many would the SGA have to sell to achieve its financial goal?
The Tech Student Government Association (SGA) is selling t-shirts to create an "orange effect" for the football game (Tech's school color is orange). The club's financial goal is to make a profit of $150,000, but in order to have a large number of fans buy the shirts and wear them, it doesn't want to price the t-shirts much more than $6. The SGA would like to sell approximately 45,000 orange t-shirts to achieve the desired orange effect, which it's relatively confident it can do. It will cost $100,000 to purchase, screen print and ship this many t-shirts. The SGA sells the shirts through 3 sources: online, two college bookstores, and a local independent bookstore. While the bookstores don't want a share in the profit, they do expect their direct costs to be covered, including labor, space and other costs. The two Tech bookstores charge the SGA $0.35 per shirt, and the local independent store charges $0.50 per shirt. The cost per sale online (including shipping, handling, and packaging) is $2.30 per shirt. The SGA estimates that it will sell 50% of the shirts at the two college bookstores, 35% at the local bookstore, and 15% online. Using Excel worksheet: a. If the SGA sells the t-shirts for $6 and if it sells all the shirts it orders, will it make enough profits to achieve its financial goal? b. If not, at what price would the SGA need to sell the t-shirts, or how many would the SGA have to sell to achieve its financial goal?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Tech Student Government Association (SGA) is selling t-shirts to create an "orange effect" for the football game (Tech's school color is orange). The club's
financial goal is to make a profit of $150, 000, but in order to have a large number of fans buy the shirts and wear them, it doesn't want to price the t-shirts
much more than $6. The SGA would like to sell approximately 45,000 orange t-shirts to achieve the desired orange effect, which it's relatively confident it can
do. It will cost $100,000 to purchase, screen print and ship this many t-shirts. The SGA sells the shirts through 3 sources: online, two college bookstores, and a
local independent bookstore. While the bookstores don't want a share in the profit, they do expect their direct costs to be covered, including labor, space and
other costs. The two Tech bookstores charge the SGA $0.35 per shirt, and the local independent store charges $0.50 per shirt. The cost per sale online (including
shipping, handling, and packaging) is $2.30 per shirt. The SGA estimates that it will sell 50% of the shirts at the two college bookstores, 35% at the local
bookstore, and 15% online. Using Excel worksheet: a. If the SGA sells the t-shirts for $6 and if it sells all the shirts it orders, will it make enough profits to achieve
its financial goal? b. If not, at what price would the SGA need to sell the t-shirts, or how many would the SGA have to sell to achieve its financial goal?
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