Question: Variable Costs, Contribution Margin, Contribution Margin Ratio Super-Tees Company plans to sell 11,000 T-shirts at $25 each in the coming year. Product costs include: Direct

Variable Costs, Contribution Margin, Contribution Margin Ratio

Super-Tees Company plans to sell 11,000 T-shirts at $25 each in the coming year. Product costs include:

Direct materials per T-shirt $8.75
Direct labor per T-shirt $1.75
Variable overhead per T-shirt $0.75
Total fixed factory overhead $38,000

Variable selling expense is the redemption of a coupon, which averages $1.25 per T-shirt; fixed selling and administrative expenses total $15,000.

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