The Little Rock Shirt Company makes two types of T-shirts: basic and custom.

For March 2018, the Little Rock Shirt Company compiled the following data for the Cutting and SewingDepartments:

Department	Item	Amount	Units
Cutting	Beginning balance	$0	0	shirts
	Started in March		1,500	shirts
	Direct materials added in March	3,300
	Conversion costs	2,100
	Completed and transferred to Sewing	???	1,500	shirts
	Ending balance	0	0	shirts
Sewing	Beginning balance, transferred in, $1,440;
	conversion costs, $560	$2,000	400	shirts
	Transferred in from Cutting	???	???
	Conversion costs added in March	1,806
	Completed and transferred to Finished Goods	???	1,200	shirts
	Ending balance, 70% complete	???	???

For the same time period, the Little Rock Shirt Company compiled the following data for the Custom DesignDepartment

Job	Quantity	Design Fee	Printing		Status
367	50	Yes	2	colors	Complete
368	350	No	3	colors	Complete
369	300	Yes	5	colors	Complete
370	100	Yes	4	colors	Complete

The Little Rock 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 $1.10 per color per

1.	Complete a production cost report for the Cutting Department and the Sewing Department. What is the cost of one basic shirt?
2.	Determine the total cost and the average cost per shirt for jobs 367, 368, 369, and 370. If the company set the sales price at 180% of the total cost, determine the total sales price of each job.
3.	In addition to the custom jobs, the Little Rock Shirt Company sold 1,200 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 140% 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.	Calculate the total revenue, total cost of goods sold, and total gross profit for all sales, basic and custom.
5.	Assume the company sold only basic shirts (no custom designs) and incurred fixed costs of $1,000 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 Little Rock Shirt Company's CVP relationships. Show the breakeven point, the sales revenue line, the fixed cost line, the total costline, the operating loss area, and the operating income area.
	d.	Suppose the Little Rock Shirt Company wants to earn an operating income of $1,600 per month. Compute the required sales in units and dollars to achieve this profit goal.
6.	The Little Rock 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 $1.25 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 $0.80. Should the company manufacture the cloth bags? Why or why not?