Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Ruben Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to
Ruben Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 20,000 shirts to break even. The operating profit last year was $5,040. Ruben's expectations for the coming year include the following:
- The sales price of the T-shirts will be $9
- Variable costs to manufacture will increase by one-third
- Fixed costs will increase by 10%
- The income tax rate of 40% will be unchanged
Required: The selling price that would maintain the same contribution margin ratio as last year is:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started