REQ 1 OPTIONS:

Contributions margin per unit

Fixed costs

Net sales revenue

Net sales revenue per unit

Variable costs

REQ 2:

CM Per unit, CM Ratio, Fixed costs, variable costs + CM per unit, CM Ratio, Sales price, Target profit / CM per unit, CM Ratio, Fixed costs, variable costs.

REQ 3: Conribution Margin

Cost of goods sold

Fixed costs

Gross profit

Sales revenue

Variable costs

REQ4:

Contribution Margin per unit

Fixed costs

Net sales revenue

Net sales revenue per unit

Variable costs

Options are: Are equal to, are greater than, & are less than

Allen Company sells flags with team logos. Allen has fixed costs of $583,200 per year plus variable costs of $4.80 per flag. Each flag sells for $12.00. Requirements 1. Use the equation approach to compute the number of flags Allen must sell each year to break even. 2. Use the contribution margin ratio approach to compute the dollar sales Allen needs to earn $33,000 in operating income for 2016. (Round the contribution margin ratio to two decimal places.) 3. Prepare Allen's contribution margin income statement for the year ended December 31, 2016, for sales of 71,000 flags. (Round your final answers up to the next whole number.) 4. The company is considering an expansion that will increase fixed costs by 21% and variable costs by $0.60 per flag. Compute the new breakeven point in units and in dollars. Should Allen 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 Allen must sell each year to break even. First, select the formula to compute the required sales in units to break even. - Target profit Rearrange the formula you determined above and compute the required number of flags to break even The number of flags Allen must sell each year to break even is Requirement 2. Use the contribution margin ratio approach to compute the dollar sales Allen needs to earn $33,000 in operating income for 2016. (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 $33,000 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.) = Required sales in dollars