Biology Forums - Study Force

Arlo's T-shirt Shop only has three costs: T-shirt cost, rent cost on the shop, and utilities cost. Arlo's sells the T-shirts for $14.50 each. Management has prepared the following cost information for next month:

	At 8,000 T-shirts	At 10,000 T-shirts
T-shirt cost	$ 48,000	$ 60,000
Rent cost	$ 3,600	$ 3,600
Utilities cost	$ 6,800	$ 8,300

Assume that all of the activity levels mentioned in this problem are within the relevant range.

Required:

a. Calculate Arlo's total variable cost if 9,000 T-shirts are sold next month.
b. Prepare Arlo's contribution format income statement if 10,000 T-shirts are sold.

Content hidden