Question: a. Using the information contained in the case and the previous budgets, calculate the estimated contribution margin per unit for 2013. (Hint: Silk-screened labor and

a. Using the information contained in the case and the previous

budgets, calculate the estimated contribution margin per unit for 2013. (Hint: Silk-screened

labor and the taxes are both fixed cost.) b. Calculate the total

estimated fixed cost for 2013 (including interest and taxes). c. Computer the

break-even point in units and dollars for 2013. d. Michael is very

disappointed that the company did not have an income of 25,000 for

its first year of budgeted operations as he had wanted. How many

shirts would the company have to sell in order to have a

profit of 25,000? (Ignore changes in income tax expense.) e. Why does

the companys net income differ from its ending cash balance? f. Do you think it was a good idea to offer Cary Sue a salary plus 10% of sales? Why or why not? image text in transcribed

image text in transcribed

a. Using the information contained in the case and the previous budgets, calculate the estimated contribution margin per unit for 2013. (Hint: Silk-screened labor and the taxes are both fixed cost.)

b. Calculate the total estimated fixed cost for 2013 (including interest and taxes).

c. Computer the break-even point in units and dollars for 2013.

d. Michael is very disappointed that the company did not have an income of 25,000 for its first year of budgeted operations as he had wanted. How many shirts would the company have to sell in order to have a profit of 25,000? (Ignore changes in income tax expense.)

e. Why does the companys net income differ from its ending cash balance?

f. Do you think it was a good idea to offer Cary Sue a salary plus 10% of sales? Why or why not?

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