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Production and sales volume Selling price Direct material I-SHIRTS 64,000 units $16.00 $2.00 $4.50 $2.00 $7.50 $4.00 $3.50 SWEATSHIRTS 24,000 units $29.00 $5.00 $9.20 $3.00
Production and sales volume Selling price Direct material I-SHIRTS 64,000 units $16.00 $2.00 $4.50 $2.00 $7.50 $4.00 $3.50 SWEATSHIRTS 24,000 units $29.00 $5.00 $9.20 $3.00 $11.80 $7.00 Direct labor Manufacturing overhead Gross profit Selling and administrative Operating profit $4.80 What is the projected decline in operating income if the direct materials costs of T-Shirts increase to $3.50 per unit and direct labor costs of Sweatshirts increase to $15.00 per unit? A. $235,200 B. $96,000 C. $139,200 D. $584,000
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