Newham Textiles Manufactures and Sells T-Shirts Imprinted with College Names

question 18

Multiple Choice

Newham Textiles manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for £7.50 each, and the variable expense was £2.25 per unit.
The company needed to sell 20,000 shirts to break even. The net operating income last year was £8,400. Donnelly's expectations for the coming year include the following:
* The selling price of the T-shirts will be £9.00.
* Variable expenses will increase by one third.
* Fixed expenses will increase by 10 selling price
-needed next year to maintain the same contribution margin ratio as last year is

• A)£ 9.00
• B)£ 8.25
• C)£10.00
• D)£ 9.75

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