Register
Perfect fit company sells hand-sewn shirts for $40 per shirt. it incurs monthly fixed costs of $5,000. the contribution margin ratio is calculated to be 20%. what is the variable cost per shirt?
28.8k views
5 votes
Perfect fit company sells hand-sewn shirts for $40 per shirt. it incurs monthly fixed costs of $5,000. the contribution margin ratio is calculated to be 20%. what is the variable cost per shirt?

User Mushkie
by
6.3k points

1 Answer

2 votes
The variable cost per shirt is $32.
Solution: Contribution margin ratio 20%
Sales price per shirt $40 Contribution Margin = $40 x 20% =$8
Variable cost per shirt $32
Variable cost is a company expenses which varies on the production outputs.
User Ferdi
by
6.1k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

6.7m questions

8.9m answers

Other Questions

One reason that businesses want to combine with other businesses is to A. avoid taxes. B. delay expenses. C. hire more workers. D. reduce expenses.
Which of the following possesses the sole power to create revenue bills?
Which of the following is an example of a fixed expense? A.) Clothing B.) Rent C.) Food D.) Entertainment
A ______ is "the basic interpretive mechanism to let people know what an organization is doing and are sent out to editors and reporters in hopes of stimulating favorable stories about their organizations"
All of the following are fees typically charged by credit card companies EXCEPT: A. Late payment fee B. Balance Transfer fee C. Annual membership fee D. Reload fee
Link Copied!