Sweats Galore Case 6

1798 Words Feb 7th, 2012 8 Pages
SWEATS GALORE
1. Yes, it is important for Michael to stipulate certain criteria during planning for his new business. Michael is wise to set criteria other than simply making a profit. First, Michael wants to do something he enjoys. Because he has prior experience in a related industry and he has envi¬sioned having his own business he will be better prepared to handle the responsibilities of this new business. Michael’s positive attitude will be reflected in the way he handles employees and customers. Michael’s business will probably come from customers such as university groups, church groups, civic organizations, youth athletic clubs, and secondary school groups. Because Michael is offering quality shirts at a modest price, he will, in
…show more content…
X 50 weeks) ÷ 50,000 shirts
**$72,000 ÷ (6 X 20 hrs. X 50)

CASE 6 (Continued)

8.
SWEATS GALORE
Selling and Administrative Expenses Budget
For the Year Ending December 31, 2008 Quarter 1 2 3 4 Year
Variable expenses
Sales commissions $12,800 $16,000 $32,000 $19,200 $ 80,000
Total variable expenses 12,800 16,000 32,000 19,200 80,000
Fixed expenses
Advertising
[($25 + $75) X 13]
$ 1,300
$ 1,300
$ 1,300
$ 1,300
$ 5,200
Rent ($1,000 X .25 X 3) 750 750 750 750 3,000
Sales salaries
($1,200 X .50 X 3)
1,800
1,800
1,800
1,800
7,200
Office salaries 1,800 1,800 1,800 1,800 7,200
Depreciation* 75 75 75 75 300
Property taxes and Insurance ($380 ÷ 4) 95 95 95 95 380
Total fixed expenses 5,820 5,820 5,820 5,820 23,280
Total selling and administrative expenses $18,620 $21,820 $37,820 $25,020 $103,280
*[($2,000 ÷ 10) + ($500 ÷ 5)] ÷ 4

9.
SWEATS GALORE
Silk-screen Overhead Expenses Budget
For the Year Ending December 31, 2008 Quarter

More about Sweats Galore Case 6