Webb Company sells flags with team logos Webb has foxed costs of $1.320.000 per year plus variable costs of $11.00 per flag Each flag sells for $22.00 Road the requirements Requirement 1. Use the equation approach to compute the number of flags Webb 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 Webb must sell each year to break even is 120000 Requirement 2. Use the contribution margin ratio approach to compute the dollar sales Webb needs to earm $11,000 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 $11.000 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 ribution margin) Fxxed costs Target profit CM per unit Required sales in dollars Webb Company sells flags with team logos. Webb has fixed costs of $1,320,000 per year plus variable costs of $11.00 per flag. Each flag sells for $22.00 Read the requirements Requirement 3. Prepare Webb's contribution margin income statement for the year ended December 31, 2018, for sales of 110,000 flags. (Round your final answers up to the next whole number) (Use parentheses or a minus sign for an operating loss) Webb Company Contribution Margin Income Statement Year Ended December 31, 2018 Sales Revenue Variable Costs Cost of Goods Sold Gross Profit Operating Income (Loss) Requirement 4. The company is considering an expansion that will increase fixed costs by 40% and vanable costs by $2 20 per flag Compute the new breakeven point in units and in dollars Should Webb 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 oRUN O Compule 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 S Should Webb undertake the expansion? Give your reasoning Webb should only undertake the expansion if expected profits from the expansion the expected costs Chooso from anr liet on
