Kincaid Company sells flags with team logos. Kincaid has fixed costs of $664,000 per year plus variable costs of $13.50 per flag. Each flag sells for $37.50. Requirements 1. Use the equation approach to compute the number of flags Kincaid must sell each year to break even. 2. Use the contribution margin ratio approach to compute the dollar sales Kincaid needs to earn $100,800 in operating income for 2014. (Round the contribution margin to two decimal places.) 3. Prepare Kincaid's contribution margin income statement for the year ended December 31, 2014, for sales of 225,000 flags. (Round your final answers up to the next whole number.)
Kincaid Company sells flags with team logos. Kincaid has fixed costs of $664,000 per year plus variable costs of $13.50 per flag. Each flag sells for $37.50. Requirements 1. Use the equation approach to compute the number of flags Kincaid must sell each year to break even. 2. Use the contribution margin ratio approach to compute the dollar sales Kincaid needs to earn $100,800 in operating income for 2014. (Round the contribution margin to two decimal places.) 3. Prepare Kincaid's contribution margin income statement for the year ended December 31, 2014, for sales of 225,000 flags. (Round your final answers up to the next whole number.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Kincaid Company sells flags with team logos. Kincaid has fixed costs of $664,000
per year plus variable costs of $13.50 per flag. Each flag sells for $37.50.
Requirements
1. Use the equation approach to compute the number of flags Kincaid must sell
each year to break even.
2. Use the contribution margin ratio approach to compute the dollar sales Kincaid
needs to earn $100,800 in operating income for 2014. (Round the contribution
margin to two decimal places.)
3. Prepare Kincaid's contribution margin income statement for the year ended
December 31, 2014, for sales of 225,000 flags. (Round your final answers up to
the next whole number.)
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