Perfect Fit Jeans Co. sells blue jeans wholesale to major retailers across the country. Each pair of jeans has a selling price of $60 with $40 in variable costs of goods sold. The company has fixed manufacturing costs of $3,250,000 and fixed marketing costs of $250,000. Sales commissions are paid to the wholesale sales reps at 10% of revenues. The company has an income tax rate of 20%.

1.	How many jeans must Perfect Fit 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 Perfect Fit have to sell to earn the net income in requirement 2b if (Consider each requirement independently.)
	a.	the contribution margin per unit increases by 8%.
	b.	the selling price is increased to $62.00.
	c.	the company outsources manufacturing to an overseas company increasing variable costs per unit by $2.00 and saving 60% of fixed manufacturing costs.