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Aldo's T-shirt Shop only has three costs: T-shirt cost, rent cost on the shop, and utilities cost.
Aldo's sells the T-shirt for $14.50 each. Management has prepared the following estimated cost information for next month:
At 8,000 At 10,000T-shirts T-shirtsT-shirt cost $48,000 $60,000Rent cost $3,600 $3,600Utilities cost $6,800 $8,300Assume that all of the activity levels mentioned in this problem are within the relevant range.Required:
A. Evaluate what Aldo's should expect for total variable cost if 9,000 T-shirts are sold next month.
B. Prepare Aldo's contribution approach income statement for monthly sales volume level of 10,000 T-shirts.
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