Break Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacty, sold 127.900 units at a price of $137 per unit during the current year. Its incontestatement is as follows: Sales $14,964,300 Cost of goods sold 5,304,000 Gross profit $9,660,300 Expenses Seiling expenses $2,652.000 Administrative expenses 1.599,000 Total expenses 4,251,000 Tncome from operations $5,409,300 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 50% 40% Selling expenses 50% 50% Administrative 30% expenses Management is considering a plant expansion program for the following year that will permit an increase of $1,404,000 in ytarly sales. The expansion will increase fixed costs by $187,200, but will not affect the relationship between sales and variable costs 70% Required: 1. Determine the total variable costs and the totale costs for the current year Total variable costs 4,988,100 Total fixed costs 4,566,900 2. Determine (a) the unit variable cost and by the unit contribution maroin for the current year Unit variable cost 39.00 Unit contribution margin 78.00 3. Compute the break-even sales (units) for the current year 58,550 units 4. Compute the break-even sales (units) under the proposed program for the following year. 60,550 X units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $5,409,300 of income from operations that was earned in the current year 129,900 X units 6. Determine the maximum income from operations possible with the expanded plant. 6,033,300 X 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? 5,253,300 X Income 8. Based on the data given, would you recommend accepting the proposal