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Big Foot produces sports socks. The company has fixed expenses of $95,000 and variable axpenses of $0.95 per package. Each package sells for $1.90. The
Big Foot produces sports socks. The company has fixed expenses of $95,000 and variable axpenses of $0.95 per package. Each package sells for $1.90. The number of packages Big Foot needod to sel to eam a $23,000 operating income was 124,211 packages (rounded). If Big Foot can decrease its variable costs to $0,75 per package by increasing its ficed cosis to $110,000, how mary packiges will it have to selt to generale 523,000 of operating income? is this more or less than before? Why? Begin by ldentiving the farmua to compute the sales in units at various levels of operating income using the contrbution margin approach. Fared expenten (Ribund your anwees ip to the nearnat whole unt.) Big Foot wil have to seil packages to ganerate $23,000 of eperating income. is tia mare of less than betore? Why? Big Foot would have to sell packages of socks to earn $23,000 of operating income The increase in fasd coste completaly ofliset by the in variabie costs at the priot iaront proff volume of ales. Tharefoce, Big Foot wa need to set units in onder to achieve is terget pente ievers
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