accounting homework problem

 

Harrell Entertainment sells souvenir T-shirts at each rock concert that it sponsors. The shirts cost $7 each. Any excess shirts can be returned to the manufacturer for a full refund of the purchase price. The sales price is $20 per shirt.

 

Required:

 

 

a.

What are the total cost of shirts and cost per shirt if sales amount to 4,000, 4,500, 5,000, 5,500, or 6,000? 

b.

Is the cost of T-shirts a fixed or a variable cost?  Explain your answer.

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