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between sales and variable costs. Required: Determine the total variable costs and the total fixed costs for the current year. Total variable costs $ 8
between sales and variable costs.
Required:
Determine the total variable costs and the total fixed costs for the current year.
Total variable costs
$
$
Total fixed costs
Determine a the unit variable cost and b the unit contribution margin for the current year.
Unit variable cost
Unit contribution margin
$
Compute the breakeven sales units for the current year.
units
Compute the breakeven sales units under the proposed program for the following year.
units
units
Determine the maximum operating income possible with the expanded plant.
If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the following year?
Based on the data given, would you recommend accepting the proposal?
a In favor of the proposal because of the reduction in breakeven point.
b In favor of the proposal because of the possibility of increasing income from operations.
c In favor of the proposal because of the increase in breakeven point.
d Reject the proposal because if future sales remain at the current level, the income from operations will increase.
e Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales.
Choose the correct answer.
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