The Button-Down Custom Co

question 141

Multiple Choice

The Button-Down Custom Co.sells hand-sewn shirts for $40 per shirt.It incurs monthly fixed costs of $7,000.The contribution margin ratio is calculated to be 30%.What is the variable cost per shirt?

• A) $28.00 per shirt
• B) $52.00 per shirt
• C) $40 per shirt
• D) $70.00 per shirt

---

Definitions:

Downsloping Demand

A situation where demand decreases as the price increases, typically illustrated by a downward sloping demand curve.

Upsloping Supply

This describes a supply curve that slants upward from left to right, indicating that the quantity of goods supplied increases as the price rises.

Consumer Income

The total earnings of consumers, including salary, wages, and other income sources, influencing their purchasing power.

Production Costs

The total expenses incurred in the manufacture of products or services, including labor, materials, and overhead.