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. A) What was the variable cost per unit? B) What was the contribution margin? 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. A) What was the variable cost per unit? B) What was the contribution margin? D) What was the margin as a percentage of the cost?

Business Its Legal Ethical & Global Environment

10th Edition

ISBN:9781305224414

Author:JENNINGS

Publisher:JENNINGS

Chapter2: Business Ethics And Social Responsibility

Section: Chapter Questions

Problem 8QAP

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