Perfect Fit Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of 50 with 40 in variable costs of goods sold. The company has fixed manufacturing costs of 1500000 and fixed marketing costs of 300000. Sales commissions are paid to the wholesale sales reps at 5% of revenues. The company has an income tax rate of 20%. (include formulas)How many jeans must Perfect Fit sell in order to break even? How many jeans must the company sell in order to reach A target operating income of$520,000?A net income of$520,000? How many jeans would Perfect Fit have to sell to earn the net income in requirement above if (Consider each requirement independently.) The contribution margin per unit increases by 20%The selling price is increased to $52.00.The company outsources manufacturing to an overseas company, increasing variable costs per unit by $3.00 and saving 70% of fixed manufacturing costs.

Answered: How many jeans must the company sell in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Perfect Fit Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of 50 with 40 in variable costs of goods sold. The company has fixed manufacturing costs of 1500000 and fixed marketing costs of 300000. Sales commissions are paid to the wholesale sales reps at 5% of revenues. The company has an income tax rate of 20%. (include formulas)

How many jeans must Perfect Fit sell in order to break even?
	How many jeans must the company sell in order to reach
	A target operating income of$520,000?
A net income of$520,000?
	How many jeans would Perfect Fit have to sell to earn the net income in requirement above if (Consider each requirement independently.)
	The contribution margin per unit increases by 20%
The selling price is increased to $52.00.
The company outsources manufacturing to an overseas company, increasing variable costs per unit by $3.00 and saving 70% of fixed manufacturing costs.