SPRING 2023 TR 11AM ACCT 2023 Prin of Cost/Managerial Accounting Talia Rawlins 03/23/23 10:05 PM \# Homework: Chapter 4 Activity 3 Problem Cuestion 1, PM4-56A (similar to) Application Cost Molu Question 1 Requirement 1. Use the equation approach to compute the number of flags Kincaid must sell each year to break even. First, select the formula to compute the required sales in units to break even. Net sales reverue Variable costs Fixed costs Target profit Rearrange the formula you determined above and compute the required number of llags to break even. The number of flags Kincaid must sell each year to break even is Requirement 2. Use the contribulion margin ratio approach to compute the dollar sales Kincaid needs to earn $50,400 in cperating incorre for the year. IRound the contritution margin ratio to tw decimal places.) Begin by showing the formula and then entering the amounts to calculate the required sales dollars to earn $50,400 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 marain. Requirements 1. Use the equation approach to compute the number of flags Kincaid must sell each year to break even. 2. Use the contribution margin ratio approach to compute the dollar sales Kincaid needs to eam $50,400 in operaling income for the year. (Round the contribution margin ratio to two decimal places.) 3. Prepare Kincaids contribution margin income statement for the year ended December 31, for sales of 117,000 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 $2.40 per flag. Compute the new breakeven point in units and in dollars. Should Kincaid underlake the expansion? Give your reasoning. (Round your final answers up to the next whole number.)