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Sarahs T-Shirts business makes and sells tie dyed and embroidered T-Shirts. Sales information for the...

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Accounting

Sarahs T-Shirts business makes and sells tie dyed and embroidered T-Shirts. Sales information for the last year is shown below. During the year, Sarahs fixed manufacturing costs were $40,000 and fixed Selling and Administrative costs were $50,000. Tie Dyed Embroidered Sales units 15,000 8,000 Unit price $12 $18 Variable manufacturing cost/unit $7 $9 Sales commission (% sales) 10% 15% A. Prepare an Income Statement in Contribution Margin format for Sarahs business. Calculate breakeven units and revenue for her total business. What is her margin of safety %? How many units would Sarah have to sell to earn a $90,000 profit? B. Sarahs market research indicates she could sell 2,000 more Embroidered T-Shirts if she dropped the price to $17 and spent an additional $6,000 on Embroidered T-Shirt advertising. Should she do this? Show your calculations

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