Super-Tees Company plans to sell 12,000 T-shirts at $16 each in the coming year. Product costs include: Variable selling expense is the redemption of a coupon, which averages $0.80 per T-shirt; fixed selling and administrative expenses total $19,000. Required: 1. Calculate the: a. Variable product cost per unit b. Total variable cost per unit c. Contribution margin per unit d. Contribution margin ratio (rounded to four significant digits) e. Total fixed expense for the year 2. Prepare a contribution-margin-based income statement for Super-Tees Company for the coming year. 3. What if the per unit selling expense increased from $0.80 to $1.75? Calculate the new values for the following: a. Variable product cost per unit b. Total variable cost per unit c. Contribution margin per unit d. Contribution margin ratio (rounded to four significant digits) e. Total fixed expense for the year

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Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663
BuyFind

Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663

Solutions

Chapter 16, Problem 1CE
Textbook Problem

Super-Tees Company plans to sell 12,000 T-shirts at $16 each in the coming year. Product costs include:

Chapter 16, Problem 1CE, Super-Tees Company plans to sell 12,000 T-shirts at 16 each in the coming year. Product costs

Variable selling expense is the redemption of a coupon, which averages $0.80 per T-shirt; fixed selling and administrative expenses total $19,000.

Required:

  1. 1. Calculate the:
    1. a. Variable product cost per unit
    2. b. Total variable cost per unit
    3. c. Contribution margin per unit
    4. d. Contribution margin ratio (rounded to four significant digits)
    5. e. Total fixed expense for the year
  2. 2. Prepare a contribution-margin-based income statement for Super-Tees Company for the coming year.
  3. 3. What if the per unit selling expense increased from $0.80 to $1.75? Calculate the new values for the following:
    1. a. Variable product cost per unit
    2. b. Total variable cost per unit
    3. c. Contribution margin per unit
    4. d. Contribution margin ratio (rounded to four significant digits)
    5. e. Total fixed expense for the year

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Chapter 16 Solutions

Cornerstones of Cost Management (Cornerstones Series)
Ch. 16 - Why might a multiple-product firm choose to...Ch. 16 - How do income taxes affect the break-even point...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Explain how a change in sales mix can change a...Ch. 16 - Why does the activity-based costing approach to...Ch. 16 - Super-Tees Company plans to sell 12,000 T-shirts...Ch. 16 - Jay-Zee Company makes an in-car navigation system....Ch. 16 - Health-Temp Company is a placement agency for...Ch. 16 - Olivian Company wants to earn 420,000 in net...Ch. 16 - Vandenberg, Inc., produces and sells two products:...Ch. 16 - Dupli-Pro Copy Shop provides photocopying service....Ch. 16 - Ringsmith Company is considering two different...Ch. 16 - Zebra Company manufactures custom-designed skins...Ch. 16 - Gelbart Company manufactures gas grills. Fixed...Ch. 16 - Schylar Pharmaceuticals, Inc., plans to sell...Ch. 16 - Reagan, Inc., has developed a chew-proof dog...Ch. 16 - Jonah Graham owns and operates The Green Thumb...Ch. 16 - Big Red Motors, Inc., employs 15 sales personnel...Ch. 16 - Sports-Reps, Inc., represents professional...Ch. 16 - Campbell Company manufactures and sells adjustable...Ch. 16 - Head-Gear Company produces helmets for bicycle...Ch. 16 - Sara Pacheco is a sophomore in college and earns a...Ch. 16 - Carmichael Corporation is in the process of...Ch. 16 - Choose the best answer for each of the following...Ch. 16 - Nail Glow, Inc., produces novelty nail polishes....Ch. 16 - Income statements for two different companies in...Ch. 16 - Steinberg Company produces commercial printers....Ch. 16 - X-Cee-Ski Company recently expanded its...Ch. 16 - Busy-Bee Baking Company produces a variety of...Ch. 16 - Busy-Bee Baking Company produces a variety of...Ch. 16 - Jester Company had unit contribution margin on...Ch. 16 - Loessing Company produced and sold 12,000 units...Ch. 16 - Junior Company has a breakeven point of 34,600...Ch. 16 - Bialy Company had the following information: What...Ch. 16 - If a companys variable cost per unit increases,...Ch. 16 - Don Masters and two of his colleagues are...Ch. 16 - More-Power Company has projected sales of 75,000...Ch. 16 - Consider the following information on four...Ch. 16 - Hammond Company runs a driving range and golf...Ch. 16 - Salamanca produces and sells refrigerator magnets...Ch. 16 - Faldo Company produces a single product. The...Ch. 16 - Katayama Company produces a variety of products....Ch. 16 - Mahan Consulting is a service organization that...Ch. 16 - Ironjay, Inc., produces two types of...Ch. 16 - Drake Company produces a single product. Last...Ch. 16 - Salem Electronics currently produces two products:...Ch. 16 - Good Scent, Inc., produces two colognes: Rose and...

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