Toler Company sells flags with team logos. Toler has fixed costs of $ 1,680,000 per year plus variable costs of $ 7.20 per flag. Each flag sells for $ 24.00.
Requirement 1. Use the equation approach to compute the number of flags Toler must sell each year to break even.
First, select the formula to compute the required sales in units to break even.
Net sales revenue |
- |
Variable costs |
- |
|
= |
Target profit |
Rearrange the formula you determined above and compute the required number of flags to break even.
the number of flags Toler must sell each year to break even is ________?
Please show work! especially how you get the sales revenue!! Thanks
Requirement 2. Use the contribution margin ratio approach to compute the dollar sales Toler needs to earn $33,600 in operating income for 2018.
(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
$ 33,600 in operating income.
fixed costs + target profit / CM ratio = Required sales in dollars
What is the CM ratio and what would be the required sales in dollars??
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