Three university students decided to operate an on-campus business producing and selling novelty t-shirts that also promoted their university name. They were able to secure the use of a room in one of the campus buildings for a charge of $800.00 total for the school year. The students decided that they each wanted $2000 income for the year for operating the business. Advertising and promotion costs were estimated at $400 for the year. They decided that the selling price for the t-shirts would be $12.00, and their best estimate of required sales to break even was 1800 shirts. C) What was the margin as a percentage of the sales? D) What was the margin as a percentage of the cost?

Three university students decided to operate an on-campus business producing and selling novelty t-shirts that also promoted their university name. They were able to secure the use of a room in one of the campus buildings for a charge of $800.00 total for the school year. The students decided that they each wanted $2000 income for the year for operating the business. Advertising and promotion costs were estimated at $400 for the year. They decided that the selling price for the t-shirts would be $12.00, and their best estimate of required sales to break even was 1800 shirts. C) What was the margin as a percentage of the sales? D) What was the margin as a percentage of the cost?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 71P

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