Requirements:

1.

1. Complete a production cost report for the Cutting Department and the Sewing Department. What is the cost of one basic shirt?

2.

2. Determine the total cost and the average cost per shirt for jobs

367,

368,

369,and370.

If the company set the sales price at

150%

of the total cost, determine the total sales price of each job.

3.

3. In addition to the custom jobs, the

New Orleans

Shirt Company sold

1,100

basic shirts (assume the beginning balance in Finished Goods Inventory is sufficient to make these sales, and the unit cost of the basic shirts in Finished Goods Inventory is the same as the unit cost incurred this month). If the company set the sales price at

125%

of the cost, determine the sales price per unit, total sales revenue, total cost of goods sold, and total gross profit for the basic shirts.

4.

4. Calculate the total revenue, total cost of goods sold, and total gross profit for all sales, basic and custom.

5.

5. Assume the company sold only basic shirts (no custom designs) and incurred fixed costs of

$400

per month.

a.

Calculate the contribution margin per unit, contribution margin ratio, required sales in units to break even, and required sales in dollars to break even.

b.

Determine the margin of safety in units and dollars.

c.

Graph

New Orleans

Shirt Company's CVP relationships. Show the breakeven point, the sales revenue line, the fixed cost line, the total cost line, the operating loss area, and the operating income area.

d.

Suppose the

New Orleans

Shirt Company wants to earn an operating income of

$1,200

per month. Compute the required sales in units and dollars to achieve this profit goal.

6. The

New Orleans

Shirt Company is considering adding a new product line, a cloth shopping bag with custom screen printing that will be sold to grocery stores. If the current market price of cloth shopping bags is

$0.50

and the company desires a net profit of

20%,

what is the target cost? The company estimates the full product cost of the cloth bags will be

$0.20.

Should the company manufacture the cloth bags? Why or why not?

----------

Job	Quantity	Design Fee	Printing		Status
367	200	Yes	5	colors	Complete
368	300	No	3	colors	Complete
369	150	Yes	4	colors	Complete
370	100	Yes	3	colors	Complete

The

New Orleans

Shirt Company has previously determined that creating and programming the design cost

$100

per design. This is a one-time charge. If a customer places another order with the same design, the customer is not charged a second time. Additionally, the cost to print is

$0.50

per color per shirt.

----------

Cutting Department

Amount

Units

Beginning balance

$0

0

shirts

Started in March

1,400

shirts

Direct materials added in March

1,820

Conversion costs

2,100

Completed and transferred to Sewing

???

1,400

shirts

Ending balance

0

0

shirts

-----------

Sewing Department	Amount	Units
Beginning balance, transferred in, $840; conversion costs, $360	$1,200	300	shirts
Transferred in from Cutting	???	???
Conversion costs added in March	1,464
Completed and transferred to Finished Goods	???	1,100	shirts
Ending balance, 70% complete	???	???

Please show calculations and answer all questions thanks!