Donnelly corporation manufactures and sells t-shirts

Reference no: EM13575389

Donnelly Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $7.50 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 20,000 shirts to break even. The after-tax net income last year was $5,040. Donnelly's expectations for the coming year include the following:

•The sales price of the T-shirts will be $9. .

•Variable costs to manufacture each unit will increase by 33%. .

•Fixed costs will increase by 10%. .

•The income tax rate of 40% will be unchanged.

Reference no: EM13575389

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