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Variable Costs, Contribution Margin, Contribution Margin Ratio Super-Tees Company plans to sell 13,000 T-shirts at $24 each in the coming year. Product costs include: Direct

Variable Costs, Contribution Margin, Contribution Margin Ratio

Super-Tees Company plans to sell 13,000 T-shirts at $24 each in the coming year. Product costs include:

Direct materials per T-shirt $8.40
Direct labor per T-shirt $1.68
Variable overhead per T-shirt $0.72
Total fixed factory overhead $45,000

Variable selling expense is the redemption of a coupon, which averages $1.20 per T-shirt; fixed selling and administrative expenses total $13,000.

Required:

1. Calculate the following values: Round dollar amounts to the nearest cent and round ratio values to three decimal places (express the ratio as a decimal rather than a percentage).

a. Variable product cost per unit $
b. Total variable cost per unit $
c. Contribution margin per unit $
d. Contribution margin ratio
e. Total fixed expense for the year $

2. Prepare a contribution-margin-based income statement for Super-Tees Company for the coming year. If required, round your per unit answers to the nearest cent.

Super-Tees Company
Contribution-Margin-Based Operating Income Statement
For the Coming Year
Total Per Unit
$ $
$ $
$

3. What if the per unit selling expense increased from $1.20 to $2.55? Calculate new values for the following: Round dollar amounts to the nearest cent and round ratio values to four decimal places (express the ratio as a decimal rather than a percentage):

a. Variable product cost per unit $
b. Total variable cost per unit $
c. Contribution margin per unit $
d. Contribution margin ratio
e. Total fixed expense for the year $

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