# The fashion-plus clothing company (fpcc) is a well-known manufacturer of high quality clothing. fpcc is planning to introduce a new line of men's sport shirts next year. fpcc knows what it will cost to produce the shirts: cloth \$2.20 per shirt buttons .05 per shirt thread .05 per shirt direct labor 1.33 per shirt shipping .27 per packaged shirtfpcc wants to follow a penetration pricing strategy in which the shirts will be priced \$15.00 in the retail store. retailers are accustomed to a 40% markup on shirts. fpcc knows that it will incur advertising and selling costs of \$30,000 the first year in order to introduce the new line. other fixed costs for the new shirts will be around \$117,660. required: 1. what dollar sales will fpcc need to have at manufacturer's prices before it starts making a profit?

Dwould be the correct answer to this problem

an online clothing brand

explanation:

232, 255 dollar sales FPCC need to have at manufacturer's prices before it starts making a profit.

Explanation

Lets start with calculation of Variable cost that includes following

Cloth per shirt = 2.2

Button per shirt = 0,05

Thread per shirt = 0.05

Direct labor per shirt = 1.33

Shipping per shirt = 0.27

Adding all these above cost we get per unit varibale cost = 3.9

Manufacturing sales price = 15/140*100 = 10.7

Now calculating sales = 10.7-3.9 = 6.8

Now calculating break even in order to determine point of profitable

Break even = FV/ contribution per unit = 147,600/ 6.8 = 21,706 units

Sales in dollars = 21,706 * 10.7 =232, 255 aprox

Do you know the answer?

### Other questions on the subject: Business

Answera type of question that is legally permissible in a job interview because it focuses on job related factors;...Read More
B) shirts; computersExplanation:This is an example of theory of absolute advantage. It is often used to explain the pattern and benefit of trade between two countries, but it can a...Read More
answer the amount a seller is paid minus the cost of production;...Read More