McKnight Company sells flags with team logos. McKnight has fixed costs of $300,000 per year plus variable costs of $17.50 per flag. Each flag sells for $25.00.

Requirement 2. Use the contribution margin ratio approach to compute the dollar sales

McKnight needs to earn $15,000 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 earn $15,000 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.)

Requirement 3. Prepare

McKnight 's contribution margin income statement for the year ended December 31 , for sales of 34,000 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 fixed costs by

30% and variable costs by $2.50 per flag. Compute the new breakeven point in units and in dollars. Should

McKnight 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.

Begin by selecting the formula to compute the required sales in units to break even under the expansion plan.

(+v+)=Requiredsalesindollars+)%= are equal to are greater than are less than \begin{tabular}{l} McKnight Company \\ Contribution Margin Income Statement \\ Year Ended December 31, 20Xx \\ \hline \\ \hline \\ \hline \end{tabular} Requirement 1. Use the equation approach to compute the number of flags McKnight must sell each year to break even. First, select the formula to compute the required sales in units to break even. ive and compute the required number of flags to ich year to break even is in ratio approach to compute the dollar sales ng income for the year. (Round the contribution ering the amounts to calculate the required sales 2. (Round the required sales in dollars up to the would be rounded to $11. Abbreviation used: CM= 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 McKnight undertake the expansion? Give your reasoning. McKnight should only undertake the expansion if expected profits from the expansion the expected costs. Contribution margin per unit Fixed costs Net sales revenue Net sales revenue per unit Variable costs CM per unit CM ratio Fixed costs Variable costs 1. Use the equation approach to compute the number of flags McKnight must sell each year to break even. 2. Use the contribution margin ratio approach to compute the dollar sales McKnight needs to earn $15,000 in operating income for the year. (Round the contribution margin ratio to two decimal places.) 3. Prepare McKnight's contribution margin income statement for the year ended December 31 , for sales of 34,000 flags. (Round your final answers up to the next whole number.) 4. The company is considering an expansion that will increase fixed costs by 30% and variable costs by $2.50 per flag. Compute the new breakeven point in units and in dollars. Should McKnight undertake the expansion? Give your reasoning. (Round your final answers up to the next whole number.) Requirement 1 . Use the equation approach to compute the number of flags McKnight 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 flags to break even. The number of flags McKnight must sell each year to break even is