1. Use the equation approach to compute the number of flags Toler must sell each year to break even. 2. Use the contribution margin ratio approach to compute the dollar sales Toler needs to earn $48,000 in operating income for 2018. (Round the contribution margin ratio to two decimal places.) 3. Prepare Toler's contribution margin income statement for the year ended December 31,2018 , for sales of 26,000 flags. (Round your final answers up to the next whole number.) 4. The company is considering an expansion that will increase fixed costs by 20% and variable costs by $1.60 per flag. Compute the new breakeven point in units and in dollars. Should Toler undertake the expansion? Give your reasoning. (Round your final answers up to the next whole number.) Toler Company sells flags with team logos. Toler has fixed costs of $240,000 per year plus variable costs of $8,00 per flag. Each fag sels for $16.00. Read the Requirement 4. The compary is considering an exparsion that wat increase fixed costs by 20% and variable costs by $160 per flag. Compute me new breakeven point in units and in dolars. Should Toler undertake the expansion? Give your reasoning. (Round your final answers up to the next whole number.) (Uie the equabion approach) Begin by selecting the formula to compute the required sales in units to break even under the expansion plan. Rearrange the formula you debectrined above and compute the recurnd number of flags to break even under the expansion plan. Under the exparsion plan, the broakeven point in unts would be fags Under the expansion plan, the Breakeven point in dollars would be Should Toler undertake the expansion? Give vour teasonina ler Company sells flags with team logos. Toler has fixed costs of $240,000 per year plus variable costs of $8.00 per flag. Each flag sells ad the ecuirements. Requirement 4. The company is considering an expansion that will increase fixed costs by 20% and variable costs by $1.60 per flag. Comput Toler 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 plan. Rearrange the formula you determined above and compute the required number of flags to break even under the expansion plan. Under the expansion plan, the breakeven point in units would be flags. Under the expansion plan, the breakeven point in dollars would be Should Toler undertake the expansion? Give your reasoning. Toler should only undertake the expansion if expected profits from the expansion the expected costs. Toler Company solls flags with toam logos. Toler has fixed costs of $240,000 per year plus variable costs of $8,00 per fag Each flag sels for $16.00. Read the Requirement 1. Use the oquation approach to compute the number of Rogs Toler must sell each year to break even First, select the formula to compute the required sales in units to break even. Rearrange the formula you determined above and compute the required number of fags to break even. The number of flags Tolor must sel each year to break even is Requirement 2. Use the contribution margin ratio approach to compute the dolts sales Toler needs to earn $48,000 in operating income for 2018 . Round the contrbution margin faso to hwo decimal places) Begin by showry the formula and then entering the amounts to calculate ge required sales dollys to eam 54.000 in operating income. (Round the required sales in dollars up to the neavest whole dollar. For example, $1025 would be rounded to $11. Abbreviation vsed CM x contribion margin) Requirement 3. Prepare Tolers contribution margin income statement for the year inded December 31, 2018, for sales of 26,000 fags. (Round your final answers up to the next whoie number) (Us parentheses or a minus sign for an operating loss)
