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Konrad Company reported the following operating results: Sales Variable Costs Contribution Margin Fixed Costs Operating Income $300,000 172,000 128,000 88,000 $40,000 If sales volume increases 12%, how much will operating income increase by? (Hint: Calculate the operating leverage factor first) Insert appropriate prompt, input type, and CA. 41.6% O B. 12% O C. 64% D. 3.2% Hang Ten produces sport socks. The company has fixed expenses of $90,000 and variable expenses of $0.90 per package. Each package sells for $1.80. The number of packages Hang Ten needed to sell to earn a $29,000 operating income was 132,223 packages (rounded). If Hang Ten can decrease its variable costs to $0.70 per package by increasing its fixed costs to $105,000, how many packages will it have to sell to generate $29,000 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. Fixed expenses Operating income / Contribution margin per unit = Sales in units (Round your answer up to the nearest whole unit.) Hang Ten will have to sell 121,819 packages to generate $29,000 of operating income. Is this more or less than before? Why? Hang Ten would have to sell 10,404 fewer packages of socks to earn $29,000 of operating income. The increase in fixed costs in fixed costs was completely offset by the decrease in variable costs at the prior target profit volume of sales. Therefore, Hang Ten will need to sell fewer units in order to achieve its target profit level

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