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Sliva [168]
3 years ago
5

You are selling a new line of T-shirts on the boardwalk. The selling price will be $25 per shirt. The labor cost is $5 per shirt

. The administrative costs of operating the company are estimated to be $60,000 annually, and the sales and marketing expenses are $20,000 a year. Additionally, the cost of materials will be $10 per shirt. What is the break-even quantity? a. 8,000 shirts b. 16,000 shirts c. 5,334 shirts d. 3,200 shirts
Business
1 answer:
Ad libitum [116K]3 years ago
8 0

Answer:

Option (a) is correct.

Explanation:

Contribution per unit:

= Selling price per unit - Variable cost

= Selling price per unit - (Material  + labor cost)

= $25 - ($10 + $5)

= $25 - $15

= $10

Fixed cost = Administrative cost + Sales and marketing expense

                 = $60,000 + $20,000

                 = $80,000

Break-even quantity:

= Fixed cost ÷ Contribution per unit

= $80,000 ÷ $10

= 8,000 shirts

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Inside Incorporated was issued a charter on January 15 authorizing the following capital stock: Common stock, $6 par, 100,000 sh
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Answer:  

$1,114,000   -  total equity section

Balance sheet extract

common stock   (120,000 units)                   $720,000

common stock share premium                     $240,000

preference shares (8 000 units)                   $80,000

preference share premium                            $36,000

Profit (net income)                                       <u>     $ 38,000</u>

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Explanation:

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