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  3. 1.) super-tee co. plans to sell 12,000 t-shirts at

1.) Super-Tee Co. plans to sell 12,000 T-shirts at $16 each in the coming year....

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Accounting

1.) Super-Tee Co. plans to sell 12,000 T-shirts at $16 each in the coming year. Product costs include:

Direct materials per shirt $5.75

Direct labor per shirt 1.25

Variable overhead per shirt .60

Fixed overhead in total $43,000

What is the company's contribution margin?

a.)

$9.00

b.) $4.82

c.) $10.25

d.) $8.40

2.) Super-Tee has a contribution margin of 25%. How many T-shirts (rounded to the nearest shirt) must be sold in order for the company to break even?

a.) 3,583

b.) 10,750 T-shirts

c.) 5,375 T-shirts

d.) 172,000 T-shirts

3.) If Super-Tee has a contribution margin per T-shirt of $5.00. How many shirts must be sold in order to earn of profit of $20,000?

a.) 4,000

b.) 8,600

c.) 12,600

d.) 5,727

4.) If the contribution margin ratio for ABC Co. is 20%, the variable cost ratio was 80%, sales were $2,000,000 and fixed costs were $100,000, what was income from operations?

a.) $300,000

b.) $1,500,000

c.) $400,000

d.) $1,600,000

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