Happy Ten produces sports socks. The company has fixed expenses of $80,000 and vari- able expenses of $0.80 per package. Each package sells for $1.60.
1. Compute the contribution margin per package and the contribution margin ratio.
2. Find the break-even point in units and in dollars, using the contribution margin shortcut approaches.
3. Find the number of packages Happy Ten needs to sell to earn a $22,000 operating income.