Case 6 Sweats Galore

1576 words 7 pages
Answer Key: Case 6 - Sweats Galore

Question 1 It's always important to set goals to measure the success of any business. However, the first three goals are more of a mission statement while the fourth is an objective for the company. The problem is there no plan and one objective. What is he going to do if the company doesn't net the $25,000? Or what if it nets the $25,000 but there is not enough cash to sustain the business? There needs to be more objectives to make allowances for these types of situations. There needs to be a plan of action where goals change from period to period. Otherwise, the business cannot succeed.

Question 2 Hi-Lo Maintenance Units Cost
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labor cost $11,520 $14,400 $28,800 $17,280 $72,000

Question 8 SWEATS GALORE Selling and Administrative Expenses Budget For the Year Ending December 31, 2008 1Q 2Q 3Q 4Q 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 $1,300 $1,300 $1,300 $1,300 $5,200 *Rent - Sales $750 $750 $750 $750 $3,000 *Sales salaries $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 $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 Question 9 SWEATS GALORE Silk-Screen Overhead Expenses Budget For the Year Ending December 31, 2008 1Q 2Q 3Q 4Q Year Variable Costs Ink $6,000 $7,500 $15,000 $9,000 $37,500 Maintenance $264 $330 $660 $396 $1,650 Utilities $400 $500 $1,000 $600 $2,500 *Graphic Design $800 $1,000 $2,000 $1,200 $5,000 Total variable costs $7,464 $9,330 $18,660 $11,196 $46,650 Fixed Costs *Rent - Production $2,250 $2,250 $2,250 $2,250 $2,250 Maintenance $4,950 $4,950 $4,950 $4,950 $19,800

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