DJ's T-Shirt Factory Contribution Margin

The managerial accountant at DJ's T-Shirt Factory reported the price per shirt is $24.The only variable cost is $15 per shirt.The managerial accountant also reported that the sales goals were increased to 1,000 shirts during the next quarter.First,compute the unit contribution margin per shirt.If fixed expenses are $8,000,what is the forecasted operating income if 1,000 shirts are sold in the next quarter?

Question

DJ's T-Shirt Factory Contribution Margin

The managerial accountant at DJ's T-Shirt Factory reported the price per shirt is $24.The only variable cost is $15 per shirt.The managerial accountant also reported that the sales goals were increased to 1,000 shirts during the next quarter.First,compute the unit contribution margin per shirt.If fixed expenses are $8,000,what is the forecasted operating income if 1,000 shirts are sold in the next quarter?

Quizplus · Accepted Answer

B)
Unit contribution margin: $24 - $15 = $9
Operating Income: 1,000 × 9 = $9,000 - $8,000 = $1,000