Battonkill Company, operating at full capacity, sold 150,400 units at a price of $81 per unit during the current year. Its income statement for the current year is as follows:

Sales			$12,182,400
Cost of goods sold			4,320,000
Gross profit			$7,862,400
Expenses:
Selling expenses	$2,160,000
Administrative expenses	1,296,000
Total expenses			3,456,000
Income from operations			$4,406,400

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

	Fixed		Variable
Cost of goods sold	40%		60%
Selling expenses	50%		50%
Administrative expenses	70%		30%

Management is considering a plant expansion program that will permit an increase of $972,000 in yearly sales. The expansion will increase fixed costs by $129,600, but will not affect the relationship between sales and Costs that vary in total dollar amount as the level of activity changes.variable costs.

Required:

1. Determine for the current year the total Costs that tend to remain the same in amount, regardless of variations in the level of activity.fixed costs and the total variable costs.

Total fixed costs	$
Total variable costs	$

2. Determine (a) the unit variable cost and (b) the The dollars available from each unit of sales to cover fixed costs and provide operating profits.unit contribution margin for the current year.

Unit variable cost	$
Unit contribution margin	$

3. Compute the break-even sales (units) for the current year. units

4. Compute the break-even sales (units) under the proposed program. units

5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $4,406,400 of income from operations that was earned in the current year. units

6. Determine the maximum income from operations possible with the expanded plant. $

7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year? $