Dorcan Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the...
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Dorcan Corporation manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for $12.90 each, and the variable cost to manufacture them was $2.25 per unit. The company needed to sell 23,600 shirts to break-even. The after tax net income last year was $6,120. Donnelly's expectations for the coming year include the following: (CMA adapted)
The sales price of the T-shirts will be $27.
Variable cost to manufacture will increase by one-third.
Fixed costs will increase by 10%.
The income tax rate of 40% will be unchanged.
The selling price that would maintain the same contribution margin ratio as last year is:
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