Kincaid Company sells flags with team logos. Kincaid has fixed costs of $583,200 per year plus variable costs of $4.80 per flag. Each flag sells for $12.00.

Requirements:

3. Prepare Kincaid's contribution margin income statement for the year ended December 31, 2012, for sales of 72,000 flags. Cost of goods sold is 70% of variable costs. Operating costs make up the rest of variable costs and all of fixed costs. (Round your final answers to the nearest whole number.)

4. The company is considering an expansion that will increase fixed costs by 21% and variable costs by $0.60 per flag. Compute the new break-even point in units and in dollars. Should Kincaid undertake the expansion? Give your reasoning. Round your final answers to the nearest whole number.