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Review the Chapter 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: prepare a one page memo to John describeing:

1. Identify at least two fixed costs which would not change regardless of how many t-shirts Johnny Cupcakes produces.

2. How can overly optimistic sales estimates potentially hurt John Earle's business?

3. Describe how cost-volume-profit analysis could help John Earle manage Johnny Cupcakes.

Addressing problems involves identifying appropriate facts, applying chapter concepts,, and answering each problem completely.  Proper APA formatting is expected and necessary (cited sources, reference page, etc.).  Supplement and synthesize your analysis with outsides scholarly sources.  For assistance with APA citations, visit the following links: The American Psychological Association Website: http://www.apastyle.org/

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