Last year the shirts sold for $24.00each, and variable costs were $11.40per shirt. At this cost structure, the breakeven point was20,000shirts. However, the company actually earned $15,120in net income.

This year, the company is increasing its price to $27.00per shirt. Variable costs per shirt will increase by one-third, and fixed expenses will increase by $30,900. The tax rate will remain at40%.

Contribution format income statement for last year.

Calculate the contribution margin per unit for this year

How many T-shirts must the company sell this year to break even?

How many T-shirts must the company sell this year in order to earn $28,980in net income?