Dorcan Corporation Manufactures and Sells T-Shirts Imprinted with College Names

question 106

Multiple Choice

Dorcan Corporation manufactures and sells T-shirts imprinted with college names and slogans.Last year,the shirts sold for $7.50 each,and the variable cost to manufacture them was $2.25 per unit.The company needed to sell 20,000 shirts to break-even.The after tax net income last year was $5,040.Donnelly's expectations for the coming year include the following: (CMA adapted)
• The sales price of the T-shirts will be $9
• Variable cost to manufacture will increase by one-third
• Fixed costs will increase by 10%
• The income tax rate of 40% will be unchanged.
Based on a $10 selling price per unit,the number of T-shirts Dorcan Corporation must sell to break-even in the coming year is:

• A) 17,000 units.
• B) 16,500 units.
• C) 20,000 units.
• D) 22,000 units.

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Definitions:

Gown

A protective garment worn over clothing to prevent contamination or exposure to infectious materials, especially in healthcare settings.

Gloves

Protective coverings worn on the hands to reduce the risk of contamination or exposure to harmful substances.

Eyewear

Items worn over the eyes for protection or correction, including glasses, goggles, and sunglasses.

Droplet Precautions

Infection control measures designed to prevent the spread of diseases transmitted by respiratory droplets, such as influenza or meningitis.