Toler Company sells flags with team logos. Toler has fixed costs of S720,000 per year plus variable costs of $12.00 per flag. Each fag sells for $20.00 Read the requirements Requirement 1. Use the equation approach to compute the number of flags Toler must sell each year to break even. First, select the formula to compute the required sales in units to break even Net sales revenue - Variable costs . Fixed costs - Target profit Rearrange the formula you determined above and compute the required number of flags to break even. The number of flags Toler must sell each year to break even is 90,000 Requirement 2. Use the contribution margin ratio approach to coroute the dollar sales Toler needs to earn $40,000 in operating income for 2018. (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 $40,000 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.) Fixed costs + Target profit )/ CM ratio = Required sales in dollars Requirement 3. Prepare Toler's contribution margin income statement for the year ended December 31, 2018, for sales of 62,000 fags. (Round your final answers up to the next whole number.) (Use parentheses or a minus sign for an operating loss.) Toler Company Contribution Margin Income Statement Choose from any list or enter any number in the input fields and then continue to the next question Toler Company sells flags with team logos. Toler has fixed costs of $720,000 per year plus variable costs of $12.00 per flag. Each flag sells for $20.00, Read the requirements Requirement 3. Prepare Toler's contribution margin income statement for the year ended December 31, 2018, for sales of 82,000 flags. (Round your firal answers up to the next whole number.) (Use parentheses or a minus sign for an operating loss.) Toler Company Contribution Margin Income Statement Year Ended December 31, 2018 Operating Income (Loss) Requirement 4. The company is considering an expansion that will increase fixed costs by 40% and variable costs by $2.00 per flag, Compute the new breakeven point in units and in dollars. Should Toler 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. Requirement 4. The company is considering an expansion that will increase fixed costs by 40% and variable costs by $2.00 per flag. Compute the new breakeven point in units and in dollars. Should Toler 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 flags. Under the expansion plan, the breakeven point in dollars would be $ Should Toler undertake the expansion? Give your reasoning. Toler should only undertake the expansion if expected profits from the expansion the expected costs. ation an 0 Requirements mputeti 7. eterming ust selle hcom tribution vo decin 1. Use the equation approach to compute the number of flags Toler must sell each year to break even. 2. Use the contribution margin ratio approach to compute the dollar sales Toler needs to earn $40,000 in operating income for 2018. (Round the contribution margin ratio to two decimal places.) 3. Prepare Toler's contribution margin income statement for the year ended December 31, 2018, for sales of 82,000 flags. (Round your final answers up to the next whole number.) 4. The company is considering an expansion that will increase fixed costs by 40% and variable costs by $2.00 per flag. Compute the new breakeven point in units and in dollars. Should Toler undertake the expansion? Give your reasoning. (Round your final answers up to the next whole number.) come a and the ble dollar get profi pler's con Use pare flags. Print Done mpany Income Statement
