Review the Chapter 22 opener. Johnny Cupcakes, launched by
entrepreneur John Earle, produces t-shirts in unique styles and
limited quantities. Selling prices typically range from $40 per
shirt to $70 per shirt.
Required: Write a one page memo to John explaining:
1.Identify at least two fixed costs that will not change
regardless of how many t-shirts Johnny Cupcakes produces.
2.How could overly optimistic sales estimates potentially
hurt John Earle's business?
3.Explain how cost-volume-profit analysis can help John Earle
manage Johnny Cupcakes.
To receive full credit you must answer all parts of the
question in a one page memo to John, completed in WORD and
attached. Your file must end in .doc or ,docx
You will be graded on how well you address the questions. Addressing the questions involves identifying relevant facts, applying the chapter concepts,, and answering each question completely. Proper APA formatting is expected and required (cited sources, reference page, etc.). Supplement and synthesize your analysis with outsides scholarly sources.
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