Question

Super-Tees Company plans to sell 12,000 T-shirts at $16 each in the coming year. Product costs include: Direct materials per T-shirt $5.75 Direct labor per T-shirt $1.25 Variable overhead per T-shirt $0.60 Total fixed factory overhead $43,000 Variable selling expense is the redemption of a coupon, which averages $0.80 per T-shirt; fixed selling and administrative expenses total $19,000.

Required:
1. Calculate the following values Round dollar amounts to the nearest cent and round ratio values to three decimal places
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 1f required, round your per unit answers to the nearest cent Super-Tees Company Contribution-Hargin-Based Operating Income Statement For the Coming Year Per Unt

Answer 1

Answer: See explanation

Step-by-step explanation:

1a. Variable product cost per unit = 5.75 + 1.25 + 0.60 = 7.60

b. Total variable cost per unit = 5.75 + 1.25 + 0.60 + 0.80 = 8.40

c. Contribution margin per unit = Selling price - Total Variable cost per unit

= 16 - 8.40

= 7.60

d. Contribution margin ratio = (7.6/16) × 100 = 47.5

e. Total fixed expense for the year = 43000 + 19000 = 62000

2. Price per unit. Total

Sales 16. 192000

Less: variable cost 8.40. (100800)

Less: cont. marg per unit (62000)

Net operating Income = 29200