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Becky Shelton, a teacher at Kemp Middle School, is in charge of ordering the T-shirts to be sold for the school's annual fund-raising project. The T-shirts are printed with a special Kemp School logo. In some years, the supply of T-shirts has been insufficient to satisfy the number of sales orders. In other years, T-shirts have been left over. Excess T-shirts are normally donated to some charitable organization. T-shirts cost the school $7 each and are normally sold for $14 each. Ms. Shelton has decided to order 760 shirts. Required Question 1: If the school receives actual sales orders for 690 shirts, what amount of profit will the school earn? What is the cost of waste due to excess inventory?
Question 2: If the school receives actual sales orders for 785 shirts, what amount of profit will the school earn? What amount of opportunity cost will the school incur?
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