Q7) Checkerbox Company has a predicted operating income of $97,500. Their total variable expenses are $42,000 and their total fixed expenses are $96,000. They have a unit contribution margin of $15. (10 marks, 5 marks each question) 1. Calculate the required sales in units to achieve the predicted operating income. 2. Calculate the required sales in units to achieve the predicted operating income if the company's fixed expenses double from $96,000 to $192,000. Answer: 1. Total fixed costs Predicted operating income Unit contribution margin Unit sales needed to reach target income 2. New fixed costs Predicted operating income Divide by Unit contribution margin Unit sales needed to reach target income at new level of fixed costs