Question

White Company sells flags with team logos. White has fixed costs of $600,000 per year plus variable costs of $8.00 per flag. Each flag sells for $20.00. Read the requirements. 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 $36,000 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 $36,000 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.) ) 7 = Required sales in dollars ( % Requirement 3. Prepare White's contribution margin income statement for the year ended December 31, 2018, for sales of 43,000 flags. (Round your final 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 Operating Income (Loss)

Answer 1