Question 3 (5 marks) Tony's Textile Company sells shirts for men and boys. The average selling price and variable cost for each product are as follows: Men's Boys' Selling Price $28.80 Selling Price $24.00 Variable Cost $20.40 Variable Cost $16.80 Fixed costs are $38,400. Required: 1. What is the breakeven point in units for each type of shirt, assuming the sales mix is 2:1 in favor of men's shirts? (1.5 marks) 2. What is the operating income, assuming the sales mix is 2:1 in favor of men's shirts, and sales total 9,000 shirts? (1.5 marks) 3. What is meant by a product's contribution margin ratio and how is this ratio useful in the planning of business operations? (2 marks) Question 4 (5 marks) Byron Sports is a manufacturer of sportswear. It produces all of its products in one department using a process costing system. The information for the current month is as follows: Beginning work in process (30% complete as to conversion cost) 12,000 units Units started 90,000 units Units completed and transferred out ? Ending work in process (70% complete as to conversion) 8,000 units Costs: Beginning work-in-process direct materials $28,800 Beginning work-in-process conversion $5,040 Direct materials added during month $216,000 Conversion costs incurred during the month $139,200 Direct materials are added at the beginning of the process. Conversion costs are incurred uniformly throughout the production process. Costing is handled on a FIFO basis Required: a. Prepare a production cost worksheet using 5 steps approach. (3 marks) b.Under what conditions would a process costing system be more appropriate than a job order costing system? Explain. (2 marks)