1. Ten Toes produces sports socks. The company has fixed expenses of $100,000 and variable expenses of $1.00 per package. Each package sells for $2.00. Read the requirements? Requirement 1. Compute the contribution margin per package and the contribution margin ratio. Begin by identifying the formula to compute the contribution margin per package. Then compute the contribution margin per package. (Enter the amount to the nearest cent.) (1) (2) Contribution margin per unit The contribution margin per package is Compute the contribution margin ratio. (Enter the ratio as a whole percent.) Begin by identifying the formula to compute the contribution margin ratio. (3) (4) Contribution margin ratio The contribution margin ratio is %. Requirement 2. Find the breakeven point in units and dollars. Begin by identifying the formula to compute the breakeven sales in units using the contribution margin approach. (5) (6) (7) = Breakeven sales in units The breakeven point in units is Find the breakeven point in dollars using the contribution margin approach. Begin by identifying the formula to compute the breakeven point in dollars. (8) + (9) (10) = Breakeven sales in dollars The breakeven point in dollars is Requirement 3. Find the number of packages Ten Toes needs to sell to earn a $23,000 operating income. The number of packages to achieve an operating income of $23,000 is 1: Requirements 1. Compute the contribution margin per package and the contribution margin ratio. 2. Find the breakeven point in units and in dollars. 3. Find the number of packages Ten Toes needs to sell to earn a $23,000 operating income. (1) O O Contribution margin per unit O Fixed costs O Operating income O Sales price per unit Total variable cost O Variable cost per unit (2) O O Contribution margin per unit O Fixed costs o Operating income O Sales price per unit O Total variable cost O Variable cost per unit (3) (4) (5) O Contribution margin per unit O Contribution margin ratio O Fixed costs o Operating income Sales price per unit Total variable cost O Variable cost per unit O Contribution margin per unit Contribution margin ratio O Fixed costs O Operating income O Sales price per unit Total variable cost O Variable cost per unit O Contribution margin per unit Contribution margin ratio O Fixed expenses O Operating income O Units sold O Variable expenses (6) O O Contribution margin per unit O Contribution margin ratio O Fixed expenses O Operating income Units sold O Variable expenses (7) O O Contribution margin per unit O Contribution margin ratio O Fixed expenses O Operating income Units sold O Variable expenses (8) a O Contribution margin per unit O Contribution margin ratio O Fixed expenses Operating income Units sold O Variable expenses (9) (10) O Contribution margin per unit O Contribution margin ratio O Fixed expenses Operating income Units sold O Variable expenses O Contribution margin per unit O Contribution margin ratio O Fixed expenses Operating income O Units sold O Variable expenses
