Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans...

90.2K

Verified Solution

Question

Accounting

Jeans Co. sells blue jeans wholesale to major retailers acrossthe country. Each pair of jeans has a selling price of $30 with $20in variable costs of goods sold. The company has fixedmanufacturing costs of $1,150,000 and fixed marketing costs of$250,000. Sales commissions are paid to the wholesale sales reps at10?% of revenues. The company has an income tax rate of 25?%
1.
How many jeans must Just for Kids Just for Kids
sell in order to break? even?
2.
How many jeans must the company sell in order to? reach:
a.
a target operating income of $420,000??
b.
a net income of $420,000??
3.
How many jeans would Just for Kids Just for Kids
have to sell to earn the net income in requirement 2b if?(Consider each requirement? independently.)
a.
the contribution margin per unit increases by 15?%.
b.
the selling price is increased to $32.00.
c.
the company outsources manufacturing to an overseas companyincreasing variable costs per unit by $2.00 and saving 80?% offixed manufacturing costs.

Answer & Explanation Solved by verified expert

3.5 Ratings (464 Votes)

1 CMU 3020010 30 7 Break even units Fixed Cost Contribution per unit 200000 2a Units Q Fixed Cost Total operating income Contribution per unit 14000004200007 260000 2b Target operating See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

1.	How many jeans must Just for Kids Just for Kids sell in order to break? even?
2.	How many jeans must the company sell in order to? reach:
	a.	a target operating income of $420,000??
	b.	a net income of $420,000??
3.	How many jeans would Just for Kids Just for Kids have to sell to earn the net income in requirement 2b if?(Consider each requirement? independently.)
	a.	the contribution margin per unit increases by 15?%.
	b.	the selling price is increased to $32.00.
	c.	the company outsources manufacturing to an overseas companyincreasing variable costs per unit by $2.00 and saving 80?% offixed manufacturing costs.