Question
B1. You have been asked to calculate the break-even point for a new line of shirts for the Bow and Arrow Shirt Company. The costs
B1.You have been asked to calculate the break-even point for a new line of shirts for the Bow and Arrow Shirt Company. The costs are listed in the chart below.
Labour $5/shirt
Materials $10/shirt
Administrative costs $60,000 per year
Sales and Marketing expenses $20,000 per year
Bow and Arrow Company distributes its shirts through retail stores who will sell the shirt for $50 to the customer. Bow and Arrow sells the shirts for $35 to the retail store.
Using the information provided calculate the following for Bow and Arrow Shirt Company:
1. What price are they charging per shirt?
2. What are the total fixed costs?
3. What are the variable costs per unit?
4. What is the Contribution Margin per unit?
5. What is the Contribution Margin %
6.Breakeven in Units?
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