McKnight Company sells flags with team logos. McKnight has fixed costs of $264,000 per year plus variable costs of $13.20 per flag. Each flag sells for $22.00. Requirement 1. Use the equation approach to compute the number of flags McKnight must sell each year to break even. Requirement 2. Use the contribution margin ratio approach to compute the dollar sales McKnight needs to earn $17,600 in operating income for 2018. (Round the contribution margin ratio to two decimal places.) Requirement 3. Prepare McKnight's contribution margin income statement for the year ended December 31, 2018, for sales of 25,000 flags. (Round your final answers up to the next whole number.) (Use parentheses or a minus sign for an operating loss.)

McKnight Company sells flags with team logos. McKnight has fixed costs of $264,000 per year plus variable costs of $13.20 per flag. Each flag sells for $22.00. Requirement 1. Use the equation approach to compute the number of flags McKnight must sell each year to break even. Requirement 2. Use the contribution margin ratio approach to compute the dollar sales McKnight needs to earn $17,600 in operating income for 2018. (Round the contribution margin ratio to two decimal places.) Requirement 3. Prepare McKnight's contribution margin income statement for the year ended December 31, 2018, for sales of 25,000 flags. (Round your final answers up to the next whole number.) (Use parentheses or a minus sign for an operating loss.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6EB: Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit...

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