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White Company sells flags with team logos. White has fixed costs of $300,000 per year plus variable costs of $5.00 per flag. Each flag sells for $10.00. Read the requirements Requirement 1. Use the equation approach to compute the number of flags White must sell each year to break even First, select the formula to compute the required sales in units to break even Target profit Rearrange the formula you determined above and compute the required number of flags to break even. The number of flags White must sell each year to break even is Requirement 2. Use the contribution margin ratio approach to compute the dollar sales White needs to earn $10,000 in operating income for 2018. (Round the contribution margin ratio to two decimal places.) Begin by showing the formula and then entering the amounts to calculate the required sales dollars to earn $10,000 in operating income. (Round the required sales in dollars up to the nearest whole dollar For example, $10.25 would be rounded to $11 Abbreviation used CM contribution margin.) Required sales in dolan Reauirement 3. Preare Whites contribution marain income statement for the vear ended December 31. 2018. for sales of 56.000 faos, (Round vour final answers Choose from any list or enter any number in the input fields and then continue to the noxt question
Requirement 2. Use the contribution contribution margin ratio to two decimal places.) margin ratio approach to compute the dollar sales White needs to earn $10,000 in operating income for 2018. (Round the Begin by showing the formula and then entering the amounts to calculate the required sales dollars to earn $10,000 in operating income. (Round thes in dollars up to the nearest whole dollar. For example, $10 25 would be rounded to $11. Abbreviation used. CM - contribution margin ) )1 : Required sales in dollars hon margin income statement for the year ended December 31,2018, for sales of 56,000 tlags (Round your tnal answers up to the next whole number.) (Use parentheses or a minus sign for an operating loss.) White Company Contribution Margin Income Statement Year Ended December 31,2018 Choose from any list or enter any number in the input fields and then continue to the next question
for the year ended December 31, 2018, for sales of 56,000 nags. (Round your inal answers equirement 3. Prepare Whites contribution margin income statement to the next whole númber.) (Use parentheses or a minus sign for an operating loss.) White Company Contribution Margin Income Statement Year Ended December 31, 2018 Operating income (Loss)
Requirement 4. The company is considering an expansion that wa ncrease fixed costs by 20% and variable costs by S1 00 per nag Compute the new breakeven point in units and in dollars. Should White undertake the expansion? Give your reasoning. (Round your final answers up to the next whole number,) (Use the equation approach.) Begin by selecting the formula to compute the required sales in units to break even under the expansion plarn Target proft Rearrange the formula you determined above and compute the required number of flags to break even under the expansion plan the expansion plan, the breakeven point in units would be lags Under the expansion plan, the breakeven point in dolars would be Should White undertake the expansion? Give your reasoning White should only undertake the expansion if expected profits from the expansion the expected costs rom any list or enter any number in the input fields and then continue to the next question
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Answer #1

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