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ivolga24 [154]
3 years ago
14

Socks unlimited produces sport socks. the company has fixed expenses of $ 85 comma 000 and variable expenses of $ 1.20 per packa

ge. each package sells for $ 2.00. the number of packages socks unlimited needed to sell to earn an $ 22 comma 000 operating income was 133 comma 750 packages. if socks unlimited can decrease its variable costs to $ 1.00 per package by increasing its fixed costs to $ 100 comma 000​, how many packages will it have to sell to generate $ 22 comma 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. ( + ) / = sales in units
Business
1 answer:
aivan3 [116]3 years ago
6 0

Answer:

Contribution margin per unit = Sales price per unit – Variable cost per unit

$2 - $1.20=$0.80

The contribution margin per package is $ 0.80.

Breakeven sales in units = Fixed expenses + Operating income ) / Contribution margin per unit $85,000 + $22,000/0.80 = 133,750 packages

Contribution margin per package = $2 - $1.00 = $1.00

Breakeven sales in units = Fixed expenses + Operating income ) / Contribution margin per unit

$100,000 + $22,000/$1= 122,000 packages

The firm will have to sell 122,000 packages to generate $22,000 of operating income. Socks unlimited would have to sell 11,750 less packages of socks to earn $22,000 of operating income. The increase in fixed costs was completely offset by the decrease in variable costs at the prior target profit volume of sales. Therefore, the firm will need to sell less units in order to achieve its target profit level.

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To learn more about multinational enterprise from the given link:

brainly.com/question/494475

6 0
1 year ago
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swat32

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Answer:

a global strategic alliance

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A global strategic alliance is established between two or more countries that are established on different countries. In this case, TJ's headquarters are in the US and the other game company's headquarters are in Thailand. This type of alliance is very common when companies want to enter new international markets. For example, Volkswagen Group is the largest car manufacturer in the world, even though its headquarters are located in Germany, around 50% of the cars it sells are produced in China through a series of strategic alliances with Chinese car manufacturers. It was the first western car manufacturer to start producing cars in China and it really paid off for them. Its share of the Chinese car market is currently around 25%.

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