Manufacturing: Cost Item Cost per Shirt T-shirt $3.25 Transfer Paper $0.50 Ink Carts $0.10 Laser Paper $0.10 Total $3.95 Non-manufacturing: Cost Item Cost per T-shirt: Cost Item Cost per Shirt Ink Carts $0.02 Wrapping and Boxing $0.25 Total variable non-manufacturing cost per T-shirt $0.27 Total variable cost per T-shirt $4.22 3) Fixed Costs - Manufacturing and Non-manufacturing Manufacturing: Cost Item Cost per year o Artist $14,900 O Computer and Printer $7,000 o Heat Press Machine $4,000 o Labor $13,500 o Printer/Computer $6,300 Total fixed manufacturing cost per year: $45,700 Non-manufacturing: Cost Item Cost per year o Rent $42,000 o Selling and Admin $13,500 o Insurance $3,000 o Promotion $6,000 o Printer/Computer $700 Total fixed non-manufacturing cost per year: $65,200 Total fixed cost per year: $110,900 4) Cost Formulas: Cost formula for manufacturing costs: Y = $45,700 + ($3.95 x units/shirts) Cost formula for non-manufacturing costs: Y = $65,200 + ($0.27 x units/shirts) Cost formula for the T-shirt business: Y = $110,900 + ($4.22 x units/shirts) 5) If for the first year, sales = 8,200 T-shirts, and selling price is $21 per T-shirt: o Total costs = $145,504 o Net Profit = $26,696

requirements a. Continue to assume that 8,200 t-shirts will be made and sold in the first year. What is your product cost per unit under absorption costing? What is your product cost per unit under variable costing? b. Based on the estimated sales level of 8,200 t-shirts for the first year, prepare your companys (forecasted) income statement for the year ended on 6/30/2022 using both (1) the traditional format based on the absorption costing and (2) the contribution format based on the variable costing. c. Calculate contribution margin per T-shirt and contribution margin ratio