The Sock Company buys hiking socks for $6 per pair and sells them for $10. Management budgets monthly fixed costs of $10,000 for sales volumes between 0 and 12,000 pairs of socks. Read the requirements. Dollars $40,000+ $35,000- $30,000+ + $25,000- $20,000- $15,000- $10,000+ % = = Requirement 3. Compute the monthly sales level (in units) required to earn a target operating income of $6,000. Use either the equation approach or the contribution margin approach. The number of units required to earn a target operating income of $6,000 is (After you hit continue, the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 4. Prepare a graph of The Sock Company's CVP relationships. Draw the sales revenue line, the fixed cost line, and the total cost line. Label the axes, the breakeven point, the operating income area, and the operating loss area. Begin by plotting and labeling the breakeven point, and plotting and labeling the lines for sales revenue, fixed costs, and total costs. When plotting each line, use the points where the sales volume in units is equal to zero, and where the sales volume in units is equal to the breakeven point. (Enlarge the graph and use the point tool and line tool buttons displayed below to draw the graph. Click the "Add a label" box that appears to select a label for the breakeven point and for each of the lines.) Required sales in dollars C Requirements 1. Use both the equation approach and the contribution margin approach to compute the company's monthly breakeven point in units. 2. Use the contribution margin ratio approach to compute the breakeven point in sales dollars. 3. Compute the monthly sales level (in units) required to earn a target operating income of $6,000. Use either the equation approach or the contribution margin approach. 4. Prepare a graph of The Sock Company's CVP relationships. Draw the sales revenue line, the fixed cost line, and the total cost line. Label the axes, the breakeven point, the operating income area, and the operating loss area. Print Done - X Now select the graph that has the correct shaded areas and labels for the operating loss area and the operating income area. (Enlarge each graph until you can see the shading before selecting your answer.) O A. O B. O C. O D. ing Incom Q Operating Loss 1.02.08.04.05.000 Units enlarge graph ating Income, Operating Loss TAAN 1,02,0804,05,000 Units rating Los 1,02,030405,000 Units Q Operating Income Dollars $40.000 soperating Income Operating Loss 1,02,030405.000 Units Q The Sock Company buys hiking socks for $6 per pair and sells them for $10. Management budgets monthly fixed costs of $10,000 for sales volumes between 0 and 12,000 pairs of socks. Read the requirements. Dollars $40,000+ $35,000- $30,000+ + $25,000- $20,000- $15,000- $10,000+ % = = Requirement 3. Compute the monthly sales level (in units) required to earn a target operating income of $6,000. Use either the equation approach or the contribution margin approach. The number of units required to earn a target operating income of $6,000 is (After you hit continue, the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 4. Prepare a graph of The Sock Company's CVP relationships. Draw the sales revenue line, the fixed cost line, and the total cost line. Label the axes, the breakeven point, the operating income area, and the operating loss area. Begin by plotting and labeling the breakeven point, and plotting and labeling the lines for sales revenue, fixed costs, and total costs. When plotting each line, use the points where the sales volume in units is equal to zero, and where the sales volume in units is equal to the breakeven point. (Enlarge the graph and use the point tool and line tool buttons displayed below to draw the graph. Click the "Add a label" box that appears to select a label for the breakeven point and for each of the lines.) Required sales in dollars C Requirements 1. Use both the equation approach and the contribution margin approach to compute the company's monthly breakeven point in units. 2. Use the contribution margin ratio approach to compute the breakeven point in sales dollars. 3. Compute the monthly sales level (in units) required to earn a target operating income of $6,000. Use either the equation approach or the contribution margin approach. 4. Prepare a graph of The Sock Company's CVP relationships. Draw the sales revenue line, the fixed cost line, and the total cost line. Label the axes, the breakeven point, the operating income area, and the operating loss area. Print Done - X Now select the graph that has the correct shaded areas and labels for the operating loss area and the operating income area. (Enlarge each graph until you can see the shading before selecting your answer.) O A. O B. O C. O D. ing Incom Q Operating Loss 1.02.08.04.05.000 Units enlarge graph ating Income, Operating Loss TAAN 1,02,0804,05,000 Units rating Los 1,02,030405,000 Units Q Operating Income Dollars $40.000 soperating Income Operating Loss 1,02,030405.000 Units
