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Hoodie's Sweatshirts - I sell sweatshirts for $50 each. My variable cost for each shirt is $35.

My Fixed

Cost is $125,000.

     Required: 

            1. What is my Contribution Margin?

            2. What is my Contribution Margin Ratio?

            3. What is my Break-even Point?

            4. Show in a analysis Revenues, Variable Cost, Contribution Margin, Fixed Cost and Operating Income if I sold 4,000, 6,000, 10,000, and 11,000 shirts.. Also include a column for Break-even in your analysis.  The heading of the columns should be the number of sweatshirts with Revenues, VC, CM, FC and OI below for each different sales volume.

              5. Calculate how many shirts I must sell to have a TOI (Target Operating Income) of $250,000. Prepare an analysis that checks your work.

              6. Calculate how many shirts I must sell to have a TOI of $250,000 given a 30% tax rate. Again prepare an analysis that checks your work. 

Top Answer

refer to the attachment Additional for number 4, the break even for each of the... View the full answer

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