Sport Ready produces sport 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 Sport Ready needed to sell to earn a $24,000 operating income was 121,819 packages (rounded). If Sport Ready can decrease its variable costs to $1.00 per package by increasing its fixed costs to $125,000, how many packages will it have to sell to generate $24,000 of operating income? Is this more or less than before? Why? Review Only LOADING... Click the icon to see the Worked Solution. 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.) Sport Ready will have to sell 124,167 packages to generate $24,000 of operating income. Is this more or less than before? Why? Sport Ready would have to sell 2,348 more packages of socks to earn $24,000 of operating income. The increase in fixed costs was not completely offset by the decrease in variable costs at the prior target profit volume of sales. Therefore, Sport Ready will need to sell more units in order to achieve its target profit level.