Karishtha Company have a plan to sell 10,000 shirts at $15 each in the coming year. Product costs include:

Direct Material per T-shirt $4.75

Direct labour per t-shirt $2.25

Variable overhead per t shirt $0.50

Total fixed factory overhead $32000

Variable selling expense is $0.50 per shirt; xed selling and administrative expenses total $12,500.

Required:

Calculate the:

1. Variable product cost per shirt

2. Contribution margin ratio (rounded to four signicant digits)

3. Break Even point in quantity (Q)

4. Margin of Safety in Quantity (Q)

5. Number of units to sell if the desired profit is $40,000.