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Kincaid Company_Breakeven analysis




Question;Kincaid Company sells flags with team;logos. Kincaid 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 Kincaid must sell each year to break even.;2.);Use the contribution margin;ratio approach to compute the dollar sales Kincaid needs to earn $33,000 in;operating income for 2014. (Round your contribution margin ratio to two decimal;places.);3.);Prepare Kincaid?s contribution;margin income statement for the year ended December 31, 2014, for sales of;72,000 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 Kincaid;undertake the expansion? Give your reasoning. (Round your final answers up to;the next whole number.)


Paper#39904 | Written in 18-Jul-2015

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