An opening paragraph briefly introducing the problem situation.
Analysis header - The analytical section should include a discussion of the problem results as identified in the problem requirements.
Conclusion header - This section should be based on the analytical requirement(s) that solicit your opinion regarding the problem. You should provide only key, relevant information and logical discussion in support of your opinion.
APA citation(s) and reference(s).
McKnightMcKnight Company sells flags with team logos. McKnightMcKnight has fixed costs of $639,600 per year plus variable costs of $4.20 per flag. Each flag sells for $12.00.
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 McKnightMcKnight needs to earn $32,500 in operating income for 2016. (Round the contribution margin ratio to two decimal places.)
3. Prepare McKnight's contribution margin income statement for the year ended December 31, 2016, for sales of 70,000 flags. (Round your final answers up to the next whole number.)
4. The company is considering an expansion that will increase fixed costs by 23% and variable costs by $0.60 per flag. Compute the new breakeven point in units and in dollars. Should McKnightMcKnight undertake the expansion? Give your reasoning. (Round your final answers up to the next whole number.)
This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.McKnight Company sells flags with team logos. The profit of the company depends on the number of flags sold. There are two types of costs, variable costs and Fixed costs.
Variable costs are per unit cost, which is incurred as per the number of units sold. Hence the variable costs will be zero for zero units and will increase as per the increase in number of units.
Fixed costs are the costs, needs to be incurred irrespective of the number of units sold....