Battonkill Company, operating at full capacity, sold 154,100 units at a price of $48 per unit during the current year. Its income statement for the current year is as follows:

Sales			$7,396,800
Cost of goods sold			2,624,000
Gross profit			$4,772,800
Expenses:
Selling expenses	$1,312,000
Administrative expenses	784,000
Total expenses			2,096,000
Income from operations			$2,676,800

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 $576,000 in yearly sales. The expansion will increase fixed costs by $76,800, but will not affect the relationship between sales and variable costs.

Required:

1. Determine for the current year the total fixed costs and the total variable costs.

Total fixed costs	$
Total variable costs	$

2. Determine (a) the unit variable cost and (b) the 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 $2,676,800 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? $ Income