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Shamrock Inc. plans to sell 3,000 Irish sweaters for $200 each in the coming year. Product costs include:
Direct materials per sweater $40
Direct labor per sweater 10
Variable overhead per sweater 15
Total fixed factory overhead $20,000.
Variable selling expenses are $5 per sweater, and fixed selling and administrative expenses total $12,000.
Required:
Problem A. Calculate the total variable cost per unit.
Problem B. Calculate the total fixed expenses for the year.
Problem C. Prepare a contribution margin income statement for Shamrock Inc. for the coming year.
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