Sport Ready produces sports socks. The company has fixed expenses of $ 90,000 and variable expenses of

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Sport Ready produces sports socks. The company has fixed expenses of $ 90,000 and ¬≠variable expenses of $ 0.90 per package. Each package sells for $ 1.80. 


Requirements 

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

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

3. Find the number of packages Sport Ready needs to sell to earn an $ 18,000 operating income.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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Managerial Accounting

ISBN: 978-0133428377

4th edition

Authors: Karen W. Braun, Wendy M. Tietz

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