TSprint is a local company that custom-prints tech running shirts for organized racing events. The company has been in business for 2 years. Normal demand for the tech running shirts is approximately 550 shirts per event. On average, there are two events per month. The company has the following direct costs per shirt:

Direct material (tech shirts)	$4.50
Direct labor (printing)	$0.60
Direct labor (design)	$2.70
Total direct costs	$7.80

The company has historically estimated selling price based on the direct cost of providing the tech shirts. Prices reflected a 50% desired profit margin above direct costs. Recently, TSprint has experienced lower-than-normal profits and suspects that the prices it is charging are not covering all costs (direct and indirect) of providing the tech shirts. Indirect costs of the company include depreciation on the printing machines and utilities. The following data from the most recent year relate to these indirect costs:

Month	Depreciation	Tech Shirts	Utilities
JAN	200	600	1,600
FEB	200	750	2,025
MARCH	200	900	2,210
APRIL	200	1,300	2,800
MAY	200	1,200	3,240
JUNE	200	1,400	3,570
JULY	200	1,550	3,705
AUGUST	200	1,660	3,544
SEPTEMBER	200	1,350	3,100
OCTOBER	200	1,290	2,732
NOVEMBER	200	880	1,884
DECEMBER	200	900	2,060

The management accountant estimates the following regression equation with utilities as the dependent variable and the number of tech shirts as the independent variable:

y = $316 + $2.08X

If monthly sales are 1,100 tech shirts, what is the full cost per tech shirt? (Round all currency amounts to the nearest cent.)

THE OPTIONS DROP DOWN OPTIONS ARE:

- DIRECT MATERIAL (TECH SHIRTS)

- DIRECT LABOR (PRINTING)

- DIRECT LABOR (DESIGN)

- FIXED COSTS

- TOTAL DIRECT COSTS

- VARIABLE UTILITES

Why has TSprint been experiencing lower-than-normal profits?

TSprint has only been earning an (enter your response here)% profit margin on each tech shirt sold.

Profits are lower than normal because TSprint has not been aware of how the (enter your response here) costs have been affecting overall profits. The decision to base prices on 50% markup of direct costs has been (enter your response here) in recovering all costs plus desired profits related to providing the tech shirts.

What price must TSprint charge to recover all costs and earn a 30% margin on all sales?

What implications will a potential price increase have on TSprint and/or its customers? How might the owners address any negative reactions from customers?

Requirement 1. If monthly sales are 1,100 tech shirts, what is the full cost per tech shirt? (Round all currency amounts to the nearest cent.) Requirement 1. If monthly sales are 1,100 tech shirts, what is the full cost per tech shirt? (Round all currency amounts to the nearest cent.)