L Jutlet Income Jueu to break even? To earn net income of $159,600? ome if the number of customers is 145,000. 13.000 2.23 CVP analysis, sensitivity analysis. Tuff Kids Jeans Co sells blue jeans wholesale to major retauer across the country. Each pair of jeans has a selling price of $30 with $21 in variable costs of goods sold The company has fixed manufacturing costs of $1.200.000 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 25% 1 How many jeans must Tuff 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 $450,000? b. a net income of $450,000? 3. How many jeans would TuffKids have to sell to earn the net income in part 2b if (consider each require- ment independently). a. The contribution margin per unit increases by 10% b. The selling price is increased to $32.50 c. The company outsources manufacturing to an overseas company increasing variable costs per unit by $2.00 and saving 60% of fixed manufacturing costs. 24 CVD . 3-24 CVP analysis, margin of safety. Suppose Lattin Corp.'s breakeven point is revenues of $1,500,000 Fixed costs are $720,000. 1. Compute the contribution margin percentage. 2. Compute the selling price if variable costs are $13 per unit. 3. Suppose 90,000 units are sold. Compute the margin of safety in units and dollars. 4. What does this tell you about the risk of Lattin making a loss? What are the most likely reasons for this risk to increase