1. E4-41B FIND BREAK-EVEN AND TARGET PROFIT VOLUME (Learning Objectives 1 & 2)

   Happy Ten produces sports socks. The company has fixed expenses of $80,000 and variable expenses of $0.90 per package. Each package sells for $1.60.

   Requirements

   1. Compute the contribution margin per package and the contribution margin ratio.

   2. Find the break-even point in units and in dollars using the contribution margin shortcut approaches.

   3. Find the number of packages Happy Ten needs to sell to earn a $22,000 operating income.

   Check sum: Contribution margin ratio is 50%.