Pens and Prints 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 cost to manufacture will increase by one-third • Fixed costs will increase by 10% • The income tax rate of 40% will be unchanged. Sales for the coming year are expected to exceed last year's by 1,000 units. If this occurs, How much will be the sales revenue in the coming year?
Pens and Prints 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 cost to manufacture will increase by one-third • Fixed costs will increase by 10% • The income tax rate of 40% will be unchanged. Sales for the coming year are expected to exceed last year's by 1,000 units. If this occurs, How much will be the sales revenue in the coming year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pens and Prints 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 cost to manufacture will increase by one-third
• Fixed costs will increase by 10%
• The income tax rate of 40% will be unchanged.
Sales for the coming year are expected to exceed last year's by 1,000 units. If this occurs, How much will be the sales revenue in the coming year?
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