Arlo's T-shirt Shop only has three costs: T-shirt cost, rent cost on the shop, and utilities cost. Arlo's sells the T-shirts for $14.50 each. Management has prepared the following cost information for next month:
Assume that all of the activity levels mentioned in this problem are within the relevant range.
Required:
a. Calculate Arlo's total variable cost if 9,000 T-shirts are sold next month.
b. Prepare Arlo's contribution format income statement if 10,000 T-shirts are sold.

Question

Arlo's T-shirt Shop only has three costs: T-shirt cost, rent cost on the shop, and utilities cost. Arlo's sells the T-shirts for $14.50 each. Management has prepared the following cost information for next month:
  Assume that all of the activity levels mentioned in this problem are within the relevant range.
Required:
a. Calculate Arlo's total variable cost if 9,000 T-shirts are sold next month.
b. Prepare Arlo's contribution format income statement if 10,000 T-shirts are sold.

Quizplus · Accepted Answer

The Answer of Arlo's T-shirt Shop only has three costs: T-shirt cost, rent cost on the shop, and utilities cost. Arlo's sells the T-shirts for $14.50 each. Management has prepared the following cost information for next month:
  Assume that all of the activity levels mentioned in this problem are within the relevant range.
Required:
a. Calculate Arlo's total variable cost if 9,000 T-shirts are sold next month.
b. Prepare Arlo's contribution format income statement if 10,000 T-shirts are sold.

Arlo's T-Shirt Shop Only Has Three Costs: T-Shirt Cost, Rent