Right Fit Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of $40 with $30 in variable costs. The company has fixed manufacturing costs of $1,050,000 and fixed marketing costs of $150,000. Sales commissions are paid to the wholesale sales reps at 10% of revenues. The company has an income tax rate of 20%. For each question below, show your computations
Right Fit Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of $40 with $30 in variable costs. The company has fixed manufacturing costs of $1,050,000 and fixed marketing costs of $150,000. Sales commissions are paid to the wholesale sales reps at 10% of revenues. The company has an income tax rate of 20%. For each question below, show your computations
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Right Fit Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of $40 with $30 in variable costs. The company has fixed
- A net income of $300,000 taking taxes into consideration?
- How many jeans would Right Fit have to sell to earn the net income in requirement 2b if (Consider each requirement independently.)
- The contribution margin per unit increases by 20%.
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