Socks Unlimited produces sports socks. The company has foxed expenses of $85,000 and variable expenses of $1.20 per package Each package sells for $2.00 The number of packages Socks Unlimited needed to sell to earn an $22.000 operating income was 133,750 packages. If Socks Unlimited can decrease its variable costs to $1.00 per package by increasing its foxed costs to $100,000, how many packa will it have to sell to generate $22.000 of operating income? Is this more or less than before? Why? Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach Sales in uns (Round your answer up to the nearest whole unt) Socks Unlimited will have to sell is this more or less than before? Why? packages to generate $22,000 of operating income CHRED Socks Unlimited would have to sell The increase in faxed costs completely offset by the target profit volume of sales. Therefore, Socks Unlimited will need to se target profit level packages of socks to earn $22,000 of operating income in variable costs at the prior units in order to achieve its
Socks Unlimited produces sports socks. The company has foxed expenses of $85,000 and variable expenses of $1.20 per package Each package sells for $2.00 The number of packages Socks Unlimited needed to sell to earn an $22.000 operating income was 133,750 packages. If Socks Unlimited can decrease its variable costs to $1.00 per package by increasing its foxed costs to $100,000, how many packa will it have to sell to generate $22.000 of operating income? Is this more or less than before? Why? Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach Sales in uns (Round your answer up to the nearest whole unt) Socks Unlimited will have to sell is this more or less than before? Why? packages to generate $22,000 of operating income CHRED Socks Unlimited would have to sell The increase in faxed costs completely offset by the target profit volume of sales. Therefore, Socks Unlimited will need to se target profit level packages of socks to earn $22,000 of operating income in variable costs at the prior units in order to achieve its
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sh.21.
Transcribed Image Text:Socks Unlimited produces sports socks. The company has foxed expenses of $85,000 and variable expenses of $1.20 per package Each package sells for $2.00 The number of packages Socks Unlimited
needed to sell to earn an $22.000 operating income was 133,750 packages. If Socks Unlimited can decrease its variable costs to $1.00 per package by increasing its foxed costs to $100,000, how many packages
will it have to sell to generate $22.000 of operating income? is this more or less than before? Why?
Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach
Sales in uns
(Round your answer up to the nearest whole unt)
Socks Unlimited will have to sell
is this more or less than before? Why?
packages to generate $22,000 of operating income
Socks Unlimited would have to sell
The increase in faxed costs
completely offset by the
target prott volume of sales. Therefore, Socks Unlimited will need to se
target profit level
packages of socks to eam $22,000 of operating income
in variable costs at the prior
units in order to achieve its
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