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Variable Costs, Contribution Margin, Contribution Margin Ratio Super-Tees Company plans to sell 11,000 T-shirts at $16 each in the coming year. Product costs include: Direct
Variable Costs, Contribution Margin, Contribution Margin Ratio Super-Tees Company plans to sell 11,000 T-shirts at $16 each in the coming year. Product costs include: Direct materials per T-shirt $5.60 Direct labor per T-shirt $1.12 Variable overhead per T-shirt $0.48 Total fixed factory overhead $38,000 Variable selling expense is the redemption of a coupon, which averages $0.80 per T-shirt; fixed selling and administrative expenses total $18,000. 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 Sales Total variable expense Total contribution margin - $ Total fixed expense Operating income Feedback 3. What if the per unit selling expense increased from $0.80 to $1.75? 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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