Big Foot produces sports socks. The company has fixed expenses of $$85,000$ and variable expenses of $$0\mathrm{.}85$ per

package. Each package sells for $$1\mathrm{.}70.$ The number of packages Big Foot needed to sell to earn a $$27,000$ operating

income was $131,765$ packages $($rounded$).$ If Big Foot can decrease its variable costs to $$0\mathrm{.}65$ per package by

increasing its fixed costs to $$100,000,$ how many packages will it have to sell to generate $$27,000$ 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.

Operating income $+$ Fixed expenses