# accounting 2

Allen Company sells flags with team logos. Allen has fixed costs of \$ 875000 per year plus variable costs of \$ 12.50 per flag. Each flag sells for \$ 25.00.
1-Use the equation approach to compute the number of flags Allen must sell each year to break even.
2- Prepare Allen​'s contribution margin income statement for the year ended December 31​, 2018​, for sales of 61 comma 000 flags.​ (Round your final answers up to the next whole​ number.)
3-The company is considering an expansion that will increase fixed costs by 40 % and variable costs by \$ 2.50 per flag. Compute the new breakeven point in units and in dollars. Should Allen undertake the​ expansion?

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