MANAGERIAL ACCOUNTING 2302

SMITH COMPANY SELLS FLAGS WITH TEAM LOGOS.

Requirement 4. The company is considering an expansion that will increase fixed costs by 20% and variable costs by S2_20 per flag Compute the new breakeven point in units and in dollars. Should Smith 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. Target profit 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 Under the expansion plan, the breakeven point in dollars would be $ Should Smith undertake the expansion? Give your reasoning Smith should only undertake the expansion if expected profits from the expansion flags. Y the expected costs Choose from any list or enter any number in the input fields and then continue to the next question.