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the following information for questions 12 through 15. Text year, Red Shirt Company expects to...

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Accounting

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the following information for questions 12 through 15. Text year, Red Shirt Company expects to sell 32,000 shirts. Red is budgeting the following operating results for next year. Sales Variable expenses Contribution margin Fixed expenses Net income $800,000 288,000 512,000 192,000 $320,000 12. What is Red's margin of safety for next year? a. $480,000 b. $500,000 c. $512,000 d. $608,000 e. None of the above answers is correct. 13. What is Red's degree of operating leverage for next year?(rounded if necessary) a. 1.50 b. 1.56 c. 1.60 d. 2.50 e. 2.67 14. How many shirts would Red have to sell next year in order to generate $480,000 of net income? a. 38,400 b. 48,000 c. 60,000 d. 96,000 e. 42,000 15. Red is considering increasing its advertising by $48,000 next year. By how much would sales have to increase in order for Red to still generate a $320,000 net income? a. $48,000 b. $75,000 c. $76,800 d. $120,000 e. None of the above answers is correct

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