Sports Foot buys hiking socks for $6 a pair and sells them for $10. Management budgets monthly fixed expenses of $10,000 for sales volumes between 0 and 12,000 pairs. 1. Use the income statement approach and the shortcut unit contribution margin approach to compute monthly breakeven sales in units. 2. Use the shortcut contribution margin ratio approach to compute the breakeven point in sales revenue (sales dollars). 3. Compute the monthly sales level (in units) required to earn a target operating income of $18,000. Use either the income statement approach or the shortcut contribution margin approach. 4. Prepare a graph of Sports Foot's CVP relationships. Draw the sales revenue line, the fixed expense line, and the total expense line. Label the axes, the breakeven point, the operating income area, and the operating loss area. 1. Use the income statement approach and the shortcut unit contribution margin approach to compute monthly breakeven sales in units. Let's begin by using the income statement approach to compute monthly breakeven sales in units. Select the basic income statement equation. Sales revenue - Variable expenses - Fixed expenses = Operating income Using the basic income statement equation you determined above, solve for the number of units to breakeven. The number of units needed monthly to breakeven is 2500. Now identify the formula to compute the monthly breakeven sales in units using the shortcut unit contribution margin approach. (Fixed expenses + Operating income)/Contribution margin per unit = Sales in units The number of units needed monthly to breakeven is 25000