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Break - Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 1 0 1 , 4 0 0 units at
Break
Even Sales Under Present and Proposed Conditions
Darby Company, operating at full capacity, sold
units at a price of $
per unit during the current year. Its income statement is as follows:
Sales $
Cost of goods sold
Gross profit $
Expenses:
Selling expenses $
Administrative expenses
Total expenses
Income from operations $
The division of costs between variable and fixed is as follows:
Variable Fixed
Cost of goods sold
Selling expenses
Administrative expenses
Management is considering a plant expansion program for the following year that will permit an increase of $
in yearly sales. The expansion will increase fixed costs by $
but will not affect the relationship between sales and variable costs.
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