Battonkill Company, operating at full capacity, sold 112,800 units at a price of $150 per unit during 2019. Its income statement for 2019 is as follows:

Sales . . . . . . . . . . . . . . . . . . . . . . . $16,920,000

Cost of goods sold . . . . . . . . . . . . . 6,000,000

Gross profit . . . . . . . . . . . . ... . . . . . $10,920,000

Expenses:

Selling expenses . . . . . .. . . . . . . $3,000,000

Administrative expenses . . . . . . . 1,800,000

Total expenses . . . . . . . . . . . . 4,800,000

Income from operations . . . . . . . . . $6,120,000

The division of costs between fixed and variable is as follows:

Fixed Variable

Cost of sales 40% 60%

Selling expenses 50% 50%

Administrative expenses 70% 30%

Management is considering a plant expansion program that will permit an increase of $1,500,000 in yearly sales. The expansion will increase fixed costs by $200,000, but will not affect the relationship between sales and variable costs.

Required:

1. Do you think the income statement presented above helps Battonkill Company to answer the following requirements if no how this income statement shall be presented
2. Compute the break-even sales (units) for 2019.
3. Compute the break-even sales (units) under the (proposed) program.
4. Determine the amount of sales (amount) that would be necessary under the proposed

program to realize the $6,120,000 of income from operations that was earned in 2019.

5. Determine the maximum income from operations possible with the expanded plant.
6. If the proposal is accepted and sales remain at the 2019 level, what will the income?

or loss from operations is for 2020?