Prime Threads Ltd. plans to sell 12,000 hoodies at $25 each in the coming year. The product costs include: Direct materials per hoodie - $8.00 Direct labor per hoodie = $2.50 Variable overhead per hoodie = $1.20 Total fixed factory overhead - $45,000 Variable selling expense includes free shipping, which averages $1.00 per hoodie, and fixed selling and administrative expenses total $15,000. Calculate the contribution margin ratio.

Prime Threads Ltd. plans to sell 12,000 hoodies at $25 each in the coming year. The product costs include: Direct materials per hoodie - $8.00 Direct labor per hoodie = $2.50 Variable overhead per hoodie = $1.20 Total fixed factory overhead - $45,000 Variable selling expense includes free shipping, which averages $1.00 per hoodie, and fixed selling and administrative expenses total $15,000. Calculate the contribution margin ratio.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1PB: Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven...

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