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Dorcan Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $13.20 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 $13.20 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 23,800 shirts to break-even. The after tax net income last year was $6,180. Donnelly's expectations for the coming year include the following: (CMA adapted) The sales price of the T-shirts will be $28. Variable cost to manufacture will increase by one-third. Fixed costs will increase by 10%. The income tax rate of 40% will be unchanged. The selling price that would maintain the same contribution margin ratio as last year is: Multiple Choice $16.60 O $15.85 O O $17.60. O $17.10.
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