Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

E. Target just asked Gilt Company to supply the company with 425,000 sweatshirts at a special order price of $16 per sweatshirt. Gilt Company will

image text in transcribed
image text in transcribed
E. Target just asked Gilt Company to supply the company with 425,000 sweatshirts at a special order price of $16 per sweatshirt. Gilt Company will incur $125,000 in additional foxed costs to hire an additional production supervisor for this order. Assuming the original volume and costs. should Wilt Company accept this special offer? (Assume Gilt Company will incur variable selling costs as well as variable manufacturing costs related to this order.) Show your calculations supporting your 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 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 with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Accounting questions