Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Variable Costs, Contribution Margin, Contribution Margin Ratio Super-Tees Company plans to sell 13,000 T-shirts at $19 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 $19 each in the coming year. Product costs include:

Direct materials per T-shirt $6.65
Direct labor per T-shirt $1.33
Variable overhead per T-shirt $0.57
Total fixed factory overhead $44,000

Variable selling expense is the redemption of a coupon, which averages $0.95 per T-shirt; fixed selling and administrative expenses total $10,000.

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 $0.95 to $2.05? 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 $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The ASQ Certified Food Safety And Quality Auditor

Authors: Steven Wilson

4th Edition

1951058186, 978-1951058180

More Books

Students also viewed these Accounting questions