In the following chart you will find the expenses when Sheldon Shirts produces and sells $10,000$ shirts:

a$.$ Compute:

Direct materials.

Direct labor.

Fixed Manufacturing overhead.

Variable manufacturing overhead.

Total manufacturing costs.

Prime cost.

Conversion cost.

Fixed period cost.

Variable period cost.

b$.$ Calculate the break$-$even point in units and verify the BEP.

c$.$ How much dollars would they have to sell to get a $$90,000$ profit?

d$.$ What is the margin of safety in percentage of sales? What does it mean?

e$.$ If the sales increase by $5\%,$ how much will the income increase in dollars?

f$.$ The company is considering using a different material that costs $10\%$ more but will allow them

to reduce the manufacturing fixed costs by $5\%.$ Should they change?

g$.$ If they accept the changes in $f,$ how many units do they have to sell to break even?

Write the report addressed to the production manager indicating if the company should change the

material or not. Provide a summary of your analysis.