Levis Inc. produces and sells the finest quality men's clothing. The company expects the following revenues and costs in 2004 for its top quality clothing sets:
Revenues (400 sets sold at $500 per set)
$200,000
Total variable costs
$100,000
Total fixed costs
$40,000
Income tax rate
35%
a) How much is the dollar Target sales revenue of Levis Inc. needed to achieve a Target after-tax income of $130,000?
b) How many sets should Levis Inc. sell to achieve a Target after-tax income of $130,000?