Allen Company sells flags with team logos. Allen has fixed costs of $1,694,000 per year plus variable costs of $6.60 per flag. Each flag sells for $22.00. Read the requirements. Requirement 1. Use the equation approach to compute the number of flags Allen 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 fags Allen must sell each year to break even is Requirement 2. Use the contribution margin ratio approach to compute the dollar sales Allen needs to eam $92,400 in operating income for the year, (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 eam $92,400 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.) (+)+ (1+ Requirement 3. Prepare Alen's contribution margin income statement for the year ended December 31, for sales of 102,000 flags. (Round vour final answers uo to the next wholo number.) ruse oarentheses or a minus aian for an ooeratina loss.) Allen Company sells flags with team logos. Allen has fixed costs of $1,694,000 per year plus variable costs of $6.60 per flag. Each flag sells for $22.00. Read the requirements: Requirement 3. Prepare Allen's contribution margin income statement for the year ended December 31, for sales of 102,000 flags. (Round your final answers up to the next whole number.) (Use parentheses or a minus sign for an operating loss.) Requirement 4, The company is considering an expansion that will increase foxed costs by 20% and variable costs by $2.20 per flag. Compute the new breakeven point in units and in dollars, Should Allen undertake the expansion? Give your reasoning. (Round your fina! antwers 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. Allen Company sells flags with team logos. Allen has fixed costs of $1,694,000 per year plus variable costs of $6.60 per flag. Each flag sells for $22.00 Read the requirements: Requirement 4. The company is considering an expansion that will increase fixed costs by 20% and variable costs by $2.20 per flag. Compute the now breakeven point in units and in dollars. Should Allen 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 facis. Under the expansion plan, the breakeven point in dollars would be Should Allen undertake the expansion? Give your reasoning. Allen should only undertake the expansion if expected profits from the expansion the expected costs. Allen Company sells flags with team logos. Allen has fixed costs of $1,694,000 per year plus variable cos for $22.00. Read the requirements. Requirements 1. Use the equation approach to compute the number of flags Allen must sell each year to break even. 2. Use the contribution margin ratio approach to compute the dollar sales Allen needs to earn $92,400 in operating income for the year. (Round the contribution margin ratio to two decimal places.) 3. Prepare Allen's contribution margin income statement for the year ended December 31, for sales of 102,000 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 $2.20 per flag. Compute the new breakeven point in units and in dollars. Should Allen undertake the expansion? Give your reasoning. (Round your final answers up to the next whole number.)
