Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Someone answered this question wrong for me so I still don't really understand it, can someone please help me solve it correctly? CVP analysis, sensitivity

image text in transcribedSomeone answered this question wrong for me so I still don't really understand it, can someone please help me solve it correctly?
CVP analysis, sensitivity analysis. Tuff Kids Jeans Co. sells blue jeans wholesale to major retailers across the country. Each has a selling price of $30 variable costs of goods sold. The company has fixed manufacturing costs of $1,200,000 and fixed marketing costs of s300,000. 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 sel 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? each require- b. a net income of $450,000? earn the net income in part 2b if (consider 3. How many jeans would Tuff Kids have to sell to ment independently). increases by 10% a. The contribution margin per unit b. The selling price is increased $32.50 company increasing variable costs per c. The company outsources manufacturing to an overseas unit by S2.00 and saving 60% of fixed manufacturing costs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing An Integrated Approach

Authors: Richard Cascarino

3rd Edition

1485110599, 978-1485110590

More Books

Students also viewed these Accounting questions