chris wants to producr custom t-shirts. To start his company, chris will have to
ID: 368150 • Letter: C
Question
chris wants to producr custom t-shirts. To start his company, chris will have to buy a machine costing $5000. The blank t-shirts cost $2.00. The ink for each shirt costs $0.75 per shir and the other consumable for each shirt cost $0.75. Chris can sell the shirt for $0.60 each. 1.What is chris break-even pount for the machine? 2. If chris produces and sells 175 shirts per week. How many whole weeks will it take to get to the break-even point? 3. What is chris total revenue, total cost and total profit after 1 year? 4.If chris finds a new source of shirts and will pay $1.75 per t-shirt, what is the new break-even point?
Explanation / Answer
1) Cost of the machine = $5000
Selling price of each shirt = $0.60
Breakeven point for the machine = 5000/ 0.60 = 8334 shirts
2) If Chris sells 175 shirts per week,
Number of weeks taken to reach breakeven = 8334/ 175 = 47.6 weeks
It takes 47 whole weeks to get the break-even point
4) New breakeven point = 5000/1.75 = 2857 shirts
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