Variable Costs, Contribution Margin, Contribution Margin Ratio

Super-Tees Company plans to sell 13,000 T-shirts at $21 each in the coming year. Product costs include:

Direct materials per T-shirt	$7.35
Direct labor per T-shirt	$1.47
Variable overhead per T-shirt	$0.63
Total fixed factory overhead	$37,000

Variable selling expense is the redemption of a coupon, which averages $1.05 per T-shirt; fixed selling and administrative expenses total $15,000.

Required:

1. Calculate the following values: Round dollar amounts to the nearest cent and round ratio values to three decimal places (express the ratio as a decimal rather than a percentage).

a. Variable product cost per unit	$
b. Total variable cost per unit	$
c. Contribution margin per unit	$
d. Contribution margin ratio
e. Total fixed expense for the year	$

2. Prepare a contribution-margin-based income statement for Super-Tees Company for the coming year. If required, round your per unit answers to the nearest cent.

Super-Tees Company
Contribution-Margin-Based Operating Income Statement
For the Coming Year
	Total	Per Unit
Sales Total contribution margin, Total fixed expense/ Total variable expense	$	$
Sales/Total contribution margin/Total fixed expense/ Total variable expense	$	$
Sales/Total contribution margin/Total fixed expense/Total variable expense	$

3. What if the per unit selling expense increased from $1.05 to $2.25? Calculate new values for the following: Round dollar amounts to the nearest cent and round ratio values to four decimal places (express the ratio as a decimal rather than a percentage):

a. Variable product cost per unit	$
b. Total variable cost per unit	$
c. Contribution margin per unit	$
d. Contribution margin ratio
e. Total fixed expense for the year	$