Reference no: EM132476289
Hoodie's Sweatshirts - I sell sweatshirts for $50 each. My variable cost for each shirt is $35.
My Fixed Cost is $125,000.
Required:
Question 1. What is Contribution Margin?
Question 2. What is Contribution Margin Ratio?
Question 3. What is Break-even Point?
Question 4. Show in a analysis Revenues, Variable Cost, Contribution Margin, Fixed Cost and Operating Income if you sold 4,000, 6,000, 10,000, and 11,000 shirts.. Also include a column for Break-even in your analysis. The heading of the columns should be the number of sweatshirts with Revenues, VC, CM, FC and OI below for each different sales volume.
Question 5. Calculate how many shirts you must sell to have a TOI (Target Operating Income) of $250,000. Prepare an analysis that checks your work.
Question 6. Calculate how many shirts you must sell to have a TOI of $250,000 given a 30% tax rate. Again prepare an analysis that checks your work.
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