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Homework: Ch 05 HW Problem Save Score: 0.92 of 8 pts 1 of 1 (1 complete) HW Score: 11.54%, 0.92 of 8 pts PM5-39A (similar to) Question Help O McKnight Company sells flags with team logos. McKnight has fixed costs of $540,000 per year plus variable costs of $10.50 per flag. Each flag sells for $15.00. Read the requirements. 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. 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 McKnight must sell each year to break even is Requirements 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 $13,500 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 113,000 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 $1.50 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.) Enter any number in the parts Check Answer remaining Print None