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

Multiple Choice

Donnelly 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 and if Donnelly Corporation wishes to earn $37,800 in after tax net income for the coming year,the company's sales volume in dollars must be:

A) $213,750.
B) $257,625.
C) $207,000.
D) .$255,000.