Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 93,150 units at a price of $72 per current year is as follows: uring the current year. Its income statement for the Sales $6,706,800 Cost of goods sold 3,312,000 Gross profit $3,394,800 Expenses: Selling expenses Administrative expenses Total expenses $1,656,000 1,656,000 Income from operations 2,800 The division of costs between fixed and variable is as follows: Cost of goods sold Selling expenses Variable 70% 75% Fixed 30% 5% Administrative NO 50% expenses Required: 1. Determine the total variable costs and the total fixed costs for Enter the final answers rounded to the nearest dollar. Total variable costs Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution decimal places. year. Enter the final answers rounded to two Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. Enter the final answers rounded to the nearest whole number. units 4. Compute the break-even sales (units) under the proposed program for the following year. Enter the final answers rounded to the nearest whole number. units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $82,800 of income from operations that was earned in the current year. Enter the final answers rounded to the nearest whole number, units 6. Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar. ule all IILUI Sales (Units) that would be necessary under the proposed program to realize the $82,800 of income from operations that was earned in the current year. Enter the final answers rounded to the nearest whole number. units 6. Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar 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? Enter the final answer rounded to the nearest dollar. 8. Based on the data given, would you recommend accepting the proposal? a. In favor of the proposal because of the reduction in break-even point. b. In favor of the proposal Pecause of the possibility of increasing income from operations. C. In favor of the proposal because of the increase in break even 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. Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 93,150 units at a price of $72 per unit during the current year. Its income statement for the current year is as follows: Sales Cost of goods sold Gross profit $6,706,800 3,312,000 $3,394,800 Expenses: Selling expenses $1,656,000 Administrative expenses 1,656,000 Total expenses 3,312,000 Income from operations $82,800 The division of costs between fixed and variable is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses Administrative 50% expenses 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 $57,600, but will not affect the relationship between sales and variable costs 75% 256 504 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 $57,600, but will not affect the relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total fixed costs for the current year. Enter the final answers rounded to the nearest dollar Total variable costs Total foed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Enter the final answers rounded to two decimal places. Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. Enter the final answers rounded to the nearest whole number 4. Compute the break-even sales (units) under the proposed program for the following year. Enter the final answers rounded to the nearest whole number. units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $82,800 of income from operations that was eamed in the current year. Enter the final answers rounded to the nearest whole number. units 6. Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar 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? Enter the final answer rounded to the nearest Previous w program for the following year. Enter the final answers rounded to the nearest whole number units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $82,800 of income from operations that was eared in the current year. Ent the final answers rounded to the nearest whole number units 6. Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar 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? Enter the final answer rounded to the nearest dollar. 8. Based on the data given, would you recommend accepting the proposal? a. In favor of the proposal because of the reduction in break-even 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 break even 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
