Variable Costs, Contribution Margin, Contribution Margin Ratio
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 $
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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 < >SalesTotal contribution marginTotal fixed expenseTotal variable expense $ $ < >SalesTotal contribution marginTotal fixed expenseTotal variable expense < >SalesTotal contribution marginTotal fixed expenseTotal variable expense $ $ < >SalesTotal contribution marginTotal fixed expenseTotal variable expense < >Operating incomeOperating lossSalesTotal contribution margin $
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3. What if the per unit selling expense increased from $0.80 to $1.75? Calculate new values for the following:
Round dollar amounts to the nearest cent and round ratio values to four 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 $
Variable Costs, Contribution Margin, Contribution Margin Ratio
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 | $ |
Feedback
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 | |
| < >SalesTotal contribution marginTotal fixed expenseTotal variable expense | $ | $ |
| < >SalesTotal contribution marginTotal fixed expenseTotal variable expense | ||
| < >SalesTotal contribution marginTotal fixed expenseTotal variable expense | $ | $ |
| < >SalesTotal contribution marginTotal fixed expenseTotal variable expense | ||
| < >Operating incomeOperating lossSalesTotal contribution margin | $ | |
Feedback
3. What if the per unit selling expense increased from $0.80 to $1.75? Calculate new values for the following:
Round dollar amounts to the nearest cent and round ratio values to four 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 | $ |
Related questions
Variable Costs, Contribution Margin, Contribution MarginRatio
Super-Tees Company plans to sell 18,000 T-shirts at $21 each inthe coming year. Product costs include: Direct materials perT-shirt $7.35 Direct labor per T-shirt $1.47 Variable overhead perT-shirt $0.63 Total fixed factory overhead $45,000 Variable sellingexpense is the redemption of a coupon, which averages $1.05 perT-shirt; fixed selling and administrative expenses total$17,000.
3. What if the per unit sellingexpense increased from $1.05 to $2.25? Calculate new values for thefollowing:
Round dollar amounts to the nearest cent and round ratio values tofour decimal places (express the ratio as a decimal rather than apercentage):
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 | $ |
