Fact Pattern:<br/><br/><br/>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 net income last year was $5,040. Donnelly’s expectations for the coming year include the following:

-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.The selling price that would maintain the same contribution margin rate as last year is

– A.
– $10.00
– B.
– $9.00
– C.
– $8.25
– D.
– $9.75

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