Reference no: EM132056534
Question - Variable Costs, Contribution Margin, Contribution Margin Ratio
Super-Tees Company plans to sell 18,000 T-shirts at $21 each in the coming year. Product costs include:
Direct materials per T-shirt $7.35
Direct labor per T-shirt $1.47
Variable overhead per T-shirt $0.63
Total fixed factory overhead $45,000
Variable selling expense is the redemption of a coupon, which averages $1.05 per T-shirt; fixed selling and administrative expenses total $17,000.
Required:
1. Calculate the following values:
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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