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Hang Ten produces sports socks. The company has fixed expenses of $110,000 and variable expenses...

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Accounting

Hang Ten produces sports socks. The company has fixed expenses of $110,000 and variable expenses of $1.10 per package. Each package sells for $2.20. The number of packages Hang Ten
needed to sell to earn a $23,000 operating income was 120,910 packages (rounded). If Hang Ten can decrease its variable costs to $0.90 per package by increasing its fixed costs to $125,000, how
many packages will it have to sell to generate $23,000 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.
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