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CVP Multi-product Babo Designer Shirts (BDS) makes 3 types of shirts with current themes like Red Sox Rock Go Beavers, etc. The three styles are

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CVP Multi-product Babo Designer Shirts (BDS) makes 3 types of shirts with current themes like "Red Sox Rock" "Go Beavers", etc. The three styles are short sleeve T-shirts, long sleeve T-shirts and sweatshirts. Fixed costs include manufacturing of $50,000 and sales/administration of $30,000. Following is planned sales, pricing, and variable cost information for next year: Total Sweatshirt 3,000 Long Sleeve 4,000 Short Sleeve 12,000 5,000 15.00 $ 7.50 $ Sales units Unit price Var. mfg. cost Selling cost % Rev Required: 25.00 20.00 $ $ 11.00 9.00 $ 10% 8% 5% 1. Prepare a contribution margin income statement for the three shirts and total BDS for next year. $25 $15 $20 Sales ce CM 5A LS 0-3 o 732-50 -2-25 2. Calculate Breakeven Revenue, Margin of Safety %, and Degree of Operating Leverage for BDS next year. Required: 3. Calculate the revenue required for BDS to earn a 15% pre - tax return on sales next year assuming sales mix stays constant. Required: 4. Assuming sales $ mix is constant, how many sweatshirts would BDS have to sell to earn the 15 % return on sales? Required: Required: 5. Two screen printing machines operate 2,000 hours/year each. One just broke down. It takes: Minutes Short sleeve 10 Long sleeve 10 Sweatshirt 15 How many of each shirt should the company make to max profits

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