Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach.

$($ Fixed expenses $+)+$ Contribution margin per unit grad$=$ Sales $in$ units

$($Round your answer up to the nearest whole unit.$)$

Trendy Ten will have to sell $136000$ packages to generate $$27,000$ of operating income.

Is this more or less than before? Why?

Trendy Ten would have to sell

$76727$

more

packages of socks to earn $$27,000$ of operating income.

The increase in fixed costs completely offset by the

decrease

in variable costs at the prior

target profit volume of sales. Therefore, Trendy Ten will need to sell

units in order to achieve its

target profit level.