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Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. ( Fixed expenses
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 units
Round your answer up to the nearest whole unit.
Trendy Ten will have to sell packages to generate $ of operating income.
Is this more or less than before? Why?
Trendy Ten would have to sell
more
packages of socks to earn $ 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.
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