Happy Feet produces sport socks. The company has fixed expenses of $75,000 and variable expenses of $0.75 per package. Each package sells for $1.50. The number of packages Happy Feet needed to sell to earn a $24,000 operating income was 132,000 packages. If Happy Feet can decrease its variable costs to $0.65 per package by increasing its fixed costs to $90,000, how many packages will it have to sell to generate $24,000 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. Fixed expenses + Operating income Contribution margin per unit Sales in units Round your answer up to the nearest whole unit.) Happy Feet will have to sell 114000 packages to generate $24,000 of operating income. Is this more or less than before? Why? Happy Feet would have to sel8000 fewer packages of socks to earn $24,000 of operating income The increase in fixed costswas not completely offset by the decrease in variable costs at the prior target profit volume of sales. Therefore, Happy Feet will need to sellmore target profit level. units in order to achieve its