Problem 2 PT. Signature produce signature croco bag with specific target market in local and international. The bag has a selling price of $450 with $260 in variable costs of goods sold. The company has fixed manufacturing costs of $2,000,000 and fixed marketing costs of $610,000. Sales commissions are paid to each salesperson at 10% of revenues. The company has an income tax rate of 30%.

Required:

1. How many shirts must PT. Signature sell to break even?

2. How many shirts must it sell to reach?

a. target operating income of $1,595,000? How much margin of safety in units if the company can sell unit to get a target operating income of $1,595,000?

b. net income of $1,595,000?

3. How many shirts would PT. Signature have to sell to earn the net income in part 2b if: (Consider each requirement independently.)

a. the contribution margin per unit increases by 15%.

b. the selling price is increased to $550

c. the company outsources manufacturing to an overseas company increasing variable costs per unit by $90 and saving 50% of fixed manufacturing costs