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3. Are fixed or floating exchange rates better for the Euro zone countries Explain your yes or no answer: Part 1 Brinson Company, operating at
3. Are fixed or floating exchange rates better for the Euro zone countries Explain your yes or no answer: Part 1 Brinson Company, operating at full capacity, sold 80,000 units as a price of $70.75 per unit during 2016 Its income statement for 2016 is as follows: Sales.... $5,660,000 Cost of goods sold.... 2.100.000 Gross Profit $3,560,000 Expenses Selling expenses......... $1,500,000 Administrative expenses... 900,000 Total expenses.... 2,400,000 Income from operators... 51.160.000 The division of cost between fixed and variable is as follows: Variable 50% Cost of sales Selling expenses Administrative expenses Fixed 50% 30% 60% 70% 40% Management is considering a plant expansion program that will permit an increase of $884,375 in yearly sales. The expansion will increase fixed cost by $265,000, but will not affect the relationship between sales and variable costs. Instructions 1. Determine for 2016 the total fixed costs and the total variable costs. 2. Determine for 2016 (a) the unit variable cost and (b) the unit contribution margin. 3. Compute the break-even sales (units) for 2016. 4. Compute the break-even sales (units) under the proposed program. 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $1,160,000 of income from operations that was earned in 2016. 6. Determine the maximum income from operations possible with the expanded plant. . If the proposal is accepted and sales remain at the 2016 level, what will the income or loss of operations be for 2017
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