Just for You Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of $40 with $31 in variable costs of goods sold. The company has fixed manufacturing costs of $1,100,000 and fixed marketing costs of $300,000. Sales commissions are paid to the wholesale sales reps at 5% of revenues. The company has an income tax rate of 20%. Read the requirements LOADING... . Requirement 1. How many jeans must Just for You sell in order to break even? Select the formula labels, enter the amounts and calculate the breakeven number of pair of jeans. Fixed costs ÷ Contribution margin per unit = Breakeven number of units $1,400,000 ÷ $7.00 = 200,000 Requirement 2a. How many jeans must the company sell in order to reach a target operating income of $500,000? Select the formula labels, enter the amounts and calculate the number of jeans required to be sold to reach a target operating income of $500,000. (Round your answer up to the nearest whole unit.) Quantity of units ( Fixed costs + Target operating income ) ÷ Contribution margin per unit = required to be sold ( $1,400,000 + $500,000 ) ÷ $7.00 = 271,429 Requirement 2b. How many jeans must the company sell in order to reach a net income of $500,000? Now, select the formula labels, enter the amounts and calculate the number of jeans required to be sold to reach net income of $500,000. (Round your answer up to the nearest whole unit.) Quantity of units ( Fixed costs + Target net income ) ÷ Contribution margin per unit = required to be sold ( 1400,000 + 625000 ) ÷ 7 =
Just for You Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of $40 with $31 in variable costs of goods sold. The company has fixed manufacturing costs of $1,100,000 and fixed marketing costs of $300,000. Sales commissions are paid to the wholesale sales reps at 5% of revenues. The company has an income tax rate of 20%. Read the requirements LOADING... . Requirement 1. How many jeans must Just for You sell in order to break even? Select the formula labels, enter the amounts and calculate the breakeven number of pair of jeans. Fixed costs ÷ Contribution margin per unit = Breakeven number of units $1,400,000 ÷ $7.00 = 200,000 Requirement 2a. How many jeans must the company sell in order to reach a target operating income of $500,000? Select the formula labels, enter the amounts and calculate the number of jeans required to be sold to reach a target operating income of $500,000. (Round your answer up to the nearest whole unit.) Quantity of units ( Fixed costs + Target operating income ) ÷ Contribution margin per unit = required to be sold ( $1,400,000 + $500,000 ) ÷ $7.00 = 271,429 Requirement 2b. How many jeans must the company sell in order to reach a net income of $500,000? Now, select the formula labels, enter the amounts and calculate the number of jeans required to be sold to reach net income of $500,000. (Round your answer up to the nearest whole unit.) Quantity of units ( Fixed costs + Target net income ) ÷ Contribution margin per unit = required to be sold ( 1400,000 + 625000 ) ÷ 7 =
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Just for You
Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of
$40
with
$31
in variable costs of goods sold. The company has fixed $1,100,000
and fixed marketing costs of
$300,000.
Sales commissions are paid to the wholesale sales reps at
5%
of revenues. The company has an income tax rate of
20%.
Read the
requirements
LOADING...
.Requirement 1. How many jeans must
Just for You
sell in order to break even?Select the formula labels, enter the amounts and calculate the breakeven number of pair of jeans.
|
Fixed costs
|
÷
|
Contribution margin per unit
|
=
|
Breakeven number of units
|
|
$1,400,000
|
÷
|
$7.00
|
=
|
200,000
|
Requirement 2a. How many jeans must the company sell in order to reach a target operating income of
$500,000?
Select the formula labels, enter the amounts and calculate the number of jeans required to be sold to reach a target operating income of
$500,000.
(Round your answer up to the nearest whole unit.)|
|
|
|
|
|
|
|
Quantity of units
|
|
(
|
Fixed costs
|
+
|
Target operating income
|
) ÷
|
Contribution margin per unit
|
=
|
required to be sold
|
|
(
|
$1,400,000
|
+
|
$500,000
|
) ÷
|
$7.00
|
=
|
271,429
|
Requirement 2b. How many jeans must the company sell in order to reach a net income of
$500,000?
Now, select the formula labels, enter the amounts and calculate the number of jeans required to be sold to reach net income of
$500,000.
(Round your answer up to the nearest whole unit.)|
|
|
|
|
|
|
|
Quantity of units
|
|
(
|
Fixed costs
|
+
|
Target net income
|
) ÷
|
Contribution margin per unit
|
=
|
required to be sold
|
|
(
|
1400,000
|
+
|
625000
|
) ÷
|
7
|
=
|
Choose from any list or enter any number in the input fields and then click Check Answer.
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