Question
Dorcan Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to
Dorcan Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to manufacture them was $3.75 per unit. The company needed to sell 20,000 shirts to break-even. The after tax net income last year was $5,520. Donnelly's expectations for the coming year include the following: (CMA adapted)
The sales price of the T-shirts will be $10.
Variable cost to manufacture will increase by one-third.
Fixed costs will increase by 10%.
The income tax rate of 40% will be unchanged.
Based on a $10 selling price per unit and if Dorcan Corporation wishes to earn $43,323 in after tax net income for the coming year, the company's sales volume in dollars must be:
a- $29,341.
b-$31,741.
c-$30,301.
d- $309,410.
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