Your best friend Marie has decided that she is going to start her own business selling custom

T-shirts. She's had some help from her mother, a CPA, and come up with the following information:

Selling price per T-shirt $25

Variable cost per T-shirt $15

Her mother suggested that she use $3,000 as an estimate of fixed costs. At that point, Marie was confused and decided that she would ask you to explain a few things since you were taking a mangerial accounting course. In your post, answer the following questions:

1. What are variable and fixed costs? Give her an example of each that she would have with the T-shirt business.

2. How many T-shirts will she have to sell to break even? (Include what it means to break even.)

3. If she wants to earn $1,000 (target profit), how many T-shirts will she have to sell?

After you answer here questions, discuss any other information that you think would be helpful for her to consider.