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1) Green T-Shirt Processing has a unit sales price of $20 for their t-shirt. The contribution margin percentage is 70%.

If they sold 7,000 shirts last quarter and fixed costs totaled $10,000, what is their net operating income?

a. $98,000

b. They are at breakeven

c. $88,000

d. None of the above

2) Green T-Shirt Processing has a unit sales price of $20 for their t-shirt. The contribution margin percentage is 70%.

What is their breakeven point in sales dollars?

a. $10,000

b. $12,500

c. $14,700

d. $14,286

3) Green T-Shirt Processing has a unit sales price of $20 for their t-shirt. The contribution margin percentage is 70%.

What is true of Green T-Shirt Processings breakeven point?

a. For each unit sold beyond the breakeven point, $14 of additional contribution margin is generated to help produce a profit

b. For each unit sold beyond the breakeven point, $6 of additional contribution margin is generated to help produce a profit

c. Their contribution margin is $6, if they lower prices, they will breakeven

d. None of the above

4) Green T-Shirt Processing has a unit sales price of $20 for their t-shirt. The contribution margin percentage is 70%.

Green T-Shirt Processing incurs only fixed and variable costs in its operations. When 10,000 T-shirts are produced, the companys managerial accountant noted a fixed cost per shirt of $1.00 and a variable cost per pot of $6.00.

If production is expected to increase, which of the following statements is true?

a. The fixed cost per T-shirt will not change; the variable cost per T-shirt will decrease.

b. Total fixed costs will decrease; the variable cost per T-shirt will not change.

c. The fixed cost per T-shirt will decrease; the variable cost per T-shirt will increase.

d. Total fixed costs will remain unchanged; total variable costs will increase.