Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. The Dressler Manufacturing Company specializes in t-shirts. The t-shirts sell for $25 a shirt and incur $10 per t-shirt in variable costs. The company

image text in transcribed
4. The Dressler Manufacturing Company specializes in t-shirts. The t-shirts sell for $25 a shirt and incur $10 per t-shirt in variable costs. The company has $30,000 in fixed costs per month. A Prepare a contribution margin income statement for one month if the company sells 5,000 t-shirts B. What is the total contribution margin for the month when the company sells 5,000 t-shirt C. What is the unit contribution margin? D. What is the contribution margin ratio? E. What is the company's monthly breakeven point in units? F. What is the company's monthly breakeven point in sales dollars? G. What is the monthly sales level (in units) required to earn a target operating income of $80,000? Gilt Company makes sweatshirts. Its only plant can produce as many as 1,000,000 sweatshirts per year. Current production is 535,000. Annual manufacturing, selling, and administrative costs total $347,750. The variable cost of making and selling each sweatshirt is $15, Stockholders expect a 20% annual return on the company's $25,850,000 of assets. What is the company's full product cost of making and selling 535,000 sweatshirts? What is the current full unit product cost of each sweatshirt? B. Assume Gilt Company is a price-taker, and the current market prices is $25 per sweatshirt. What is the target full product cost of producing and selling 535,000 sweatshirts? Given Gilt Company's current cost, will the company reach the stockholder's profit goals? C. If Gilt Company cannot change its fixed costs, what is the target variable cost per sweatshirts? (Round to the nearest cent) D. Suppose Gilt Company could spend an extra $125,000 on advertising to differentiate its sweatshirt so that it could be a price-setter. Assuming the original volume and costs, plus the $125,000 of new advertising costs, what cost-plus price will Wilt Company want to charge for a sweatshirt

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Management Strategies For Business Decisions

Authors: Ronald Hilton, Michael Maher, Frank Selto

3rd Edition

0072830085, 978-0072830088

More Books

Students also viewed these Accounting questions