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Exhibit 2-1 a T-Shirt Company Is Planning a Production Run for an for an Event

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Exhibit 2-1
A t-shirt company is planning a production run for an event where the attendance (and thus demand for t-shirts) is uncertain. The event planners have indicated that they think the attendance will be 500, 750 or 1000, with probabilities of 30%, 50% and 20% respectively. The company must pre-order the blank t-shirts (cost=$5 per shirt) and it can sell finished shirts for $12 apiece. Any finished shirts that cannot be sold at the event can be sold for $2 apiece to a used clothing vendor.
-Refer to Exhibit 2-1.What are the two possible cases for the amount of t-shirts that will be sold to the used clothing vendor
How would you calculate this amount in a spreadsheet model

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Definitions:

Accounting Information System

An Accounting Information System is a structured framework used to collect, store, manage, process, retrieve, and report financial data.

Cost Effective

This term refers to an approach or solution that provides the best possible outcome or value for the money spent, often used in evaluating projects or investments.

Cash Receipts Journal

A special journal that records all cash received.

Subsidiary Ledger

A detailed ledger that contains the breakdown of individual accounts, which supports the balances shown in the general ledger.

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