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Happy Toes produces sports socks. The company has fixed expenses of $85,000 and variable expenses of $1.20 per package. Each package sells for $2.00. The
Happy Toes produces sports socks. The company has fixed expenses of $85,000 and variable expenses of $1.20 per package. Each package sells for $2.00. The number of packages Happy Toes needed to sell to earn a $30,000 operating income was 143,750 packages. If Happy Toes can decrease its variable costs to $1.10 per package by increasing its fixed costs to $100,000, how many packages will it have to sell to generate $30,000 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 ) + Contribution margin per unit = Sales in units (Round your answer up to the nearest whole unit.) Happy Toes will have to sell packages to generate $30,000 of operating income
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