
Comprehensive Problem for Chapters 18- 21
The Jacksonville Shirt Company makes two types of T-shirts: basic and custom. Basic shirts are plain shirts without any screen printing on them. Custom shirts are created using the basic shirts and then adding a custom screen printing design.
The company buys cloth in various colors and then makes the basic shirts in two departments, Cutting and Sewing. The company uses a
The Custom Design Department creates custom shirts by adding screen printing to the basic shirt. The department creates a design based on the customer's request and then prints the design using up to four colors. Because these shirts have the custom printing added, which is unique for each order, the additional cost incurred is determined using
For March 2018, the Jacksonville Shirt Company compiled the following data for the Cutting and Sewing Departments:
Department | Item | Amount | Units |
Cutting | Beginning balance | $ 0 | 0 shirts |
Started in March | 1,200 shirts | ||
Direct materials added in March | 1,920 | ||
Conversion costs | 1,320 | ||
Completed and transferred to Sewing | ??? | 1,200 shirts | |
Ending balance | 0 | 0 shirts |
Sewing Beginning balance, transferred in, $ 1,350
conversion costs, $650 | $2,000 | $00 shirts |
Transferred in from Cutting | ??? | ??? |
Conversion costs added in March | 1,196 | |
Completed and transferred to Finished Goods | ??? | 1,000 shirts |
Ending balance,complete | ??? | ??? |
For the same time period, the Jacksonville Shirt Company compiled the following data for the Custom Design Department
Job | Quantity | Design Fee | Printing | Status |
367 | 400 | Yes | 3 colors | Complete |
368 | 150 | No | 2 colors | Complete |
369 | 100 | Yes | 5 colors | Complete |
370 | 500 | Yes | 4 colors | Complete |
The Jacksonville Shirt Company has previously determined that creating and programming the design cost $80 per design. This is a one-time charge. If a customer places another order with the same design, the customer is not charged a second time. Additionally, the cost to print is $0.20 per color per shirt.
Requirements
5. Assume the company sold only basic shirts (no custom designs) and incurred fixed costs of $700 per month.
a. Calculate the contribution margin per unit, contribution margin ratio, required sales in units to break even, and required sales in dollars to break even.
b. Determine the margin of safety in units and dollars.
c. Graph JacksonvilleShirt Company's CVP relationships. Show the breakeven point, the sales revenue fine, the fixed cost line, the total cost fine, the operating loss area, and the operating income area.
d. Suppose the Jacksonville Shirt Company wants to earn an operating income of $1,000 per month. Compute the required sales in units and dollars to achieve this profit goal.

Want to see the full answer?
Check out a sample textbook solution
Chapter 21 Solutions
Horngren's Accounting, The Financial Chapters, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (12th Edition)
- 7. If inventory is overstated at year-end, which of the following is true?A. Net income is understatedB. Expenses are overstatedC. Net income is overstatedD. Assets are understated i need help in this question quiarrow_forwardI need correct answer 7. If inventory is overstated at year-end, which of the following is true?A. Net income is understatedB. Expenses are overstatedC. Net income is overstatedD. Assets are understatedarrow_forwardNo chatgpt 7. If inventory is overstated at year-end, which of the following is true?A. Net income is understatedB. Expenses are overstatedC. Net income is overstatedD. Assets are understatedarrow_forward
- 7. If inventory is overstated at year-end, which of the following is true?A. Net income is understatedB. Expenses are overstatedC. Net income is overstatedD. Assets are understatedneed anarrow_forwardNo ai 7. If inventory is overstated at year-end, which of the following is true?A. Net income is understatedB. Expenses are overstatedC. Net income is overstatedD. Assets are understatedarrow_forward7. If inventory is overstated at year-end, which of the following is true?A. Net income is understatedB. Expenses are overstatedC. Net income is overstatedD. Assets are understatedarrow_forward
- I mistakenly submitted blurr image please comment i will write values. please dont Solve with incorrect values otherwise unhelpful.arrow_forwardDevelopment costs in preparing the mine $ 3,400,000 Mining equipment 159,600 Construction of various structures on site 77,900 After the minerals are removed from the mine, the equipment will be sold for an estimated residual value of $12,000. The structures will be torn down. Geologists estimate that 820,000 tons of ore can be extracted from the mine. After the ore is removed, the land will revert back to the state of New Mexico. The contract with the state requires Hecala to restore the land to its original condition after mining operations are completed in approximately four years. Management has provided the following possible outflows for the restoration costs: Cash Outflow Probability $ 620,000 40% 720,000 30% 820,000 30% Hecala’s credit-adjusted risk-free interest rate is 7%. During 2024, Hecala extracted 122,000 tons of ore from the mine. The company’s fiscal year ends on December 31. Required: Determine the amount at which Hecala will record the mine. Calculate the…arrow_forwardI mistakenly submitted blurr image please comment i will write values. please dont Solve with incorrect values otherwise unhelpful.arrow_forward
- what are the Five List of Michael Porter's 5 Force Framework that describes the competitive dynamics of a firm and the industry they are in?arrow_forwardHello tutor i need help I mistakenly submitted blurr image please comment i will write values. please dont Solve with incorrect values otherwise unhelpful.arrow_forwarddefine each item below: A competitive advantage. 2) Data incorporation. 3) Financial Statement Analysis. 4) Product Differentiation. 5) Strategic positioning for a business firmarrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage LearningFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning



