Trendy Toes

produces sports socks. The company has fixed expenses of

$85,000

and variable expenses of

$0.85

per package. Each package sells for

$1.70.

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Part 1

Requirement 1. Compute the contribution margin per package and the contribution margin ratio.

Begin by computing the contribution margin per package. Then compute the contribution margin per package. (Enter the amount to the nearest cent.)

The contribution margin per package is

.

Part 2

Compute the contribution margin ratio. (Enter the ratio as a whole percent.)

The contribution margin ratio is

%.

Part 3

Requirement 2. Find the breakeven point in units and dollars.

Begin by computing the breakeven sales in units using the contribution margin approach.

The breakeven point in units is

.

Part 4

Find the breakeven point in dollars using the contribution margin approach.

The breakeven point in dollars is

.

Part 5

Requirement 3. Find the number of packages

Trendy Toes

needs to sell to earn

a

$25,500

operating income.

The number of packages to achieve an operating income of $25,500 is

.