Break Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $186 per unit during the current year. It income statement is as follows: Sales $185,000,000 Cost of goods sold (102,000,000) Gross profit 584,000,000 Expenses Selling expenses $14,000,000 Administrative expenses 3,200,000 Total expenses (22.200,000) Operating income $61,000,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30 seting expenses 75 25 Administrative 50 505 expenses Management is considering tension gram for the format will permitan crease of $13.00,Coin water the rain will increased costs by 14,500,000 but will not affect the top twee sales and variable costs Required 1. Datamine the total acts and the total con for the currean Required: 1. Determine the total variable costs and the total fixed costs for the current year, Total variable costs Totalfixed 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 for the following year units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the 501,000,000 of operating income that was earned in the current car 6. Determine themum operating income possible with the expanded plant 7. If the proces accepted and sales remain at the current level, what will the operating income roos be for the following on the one would you recomanaccong the rol in favor of the proposal because of the reduction in braven point in favor of the proposal because of the posibility of increasing income from operations In favor of the propose of the increase in beleven point 3. Compute the break-even sales (units) for the current year. units 4. Compute the break-even sales (units) under the proposed program for the following year. units S. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $61,800,000 of operating income that was earned in the current year units 6. Determine the maximum operating Income possible with the expanded plant 7. If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the following year! 1. Based on the data given, would you recommend accepting the proposal 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 of future sales remain at the current level, the income from operations will increase Reject the proposal because the sales necessary to maintain the current inconse from operations would be below the current year sales Choose the correct answer Break Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $186 per unit during the current year. It income statement is as follows: Sales $185,000,000 Cost of goods sold (102,000,000) Gross profit 584,000,000 Expenses Selling expenses $14,000,000 Administrative expenses 3,200,000 Total expenses (22.200,000) Operating income $61,000,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30 seting expenses 75 25 Administrative 50 505 expenses Management is considering tension gram for the format will permitan crease of $13.00,Coin water the rain will increased costs by 14,500,000 but will not affect the top twee sales and variable costs Required 1. Datamine the total acts and the total con for the currean Required: 1. Determine the total variable costs and the total fixed costs for the current year, Total variable costs Totalfixed 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 for the following year units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the 501,000,000 of operating income that was earned in the current car 6. Determine themum operating income possible with the expanded plant 7. If the proces accepted and sales remain at the current level, what will the operating income roos be for the following on the one would you recomanaccong the rol in favor of the proposal because of the reduction in braven point in favor of the proposal because of the posibility of increasing income from operations In favor of the propose of the increase in beleven point 3. Compute the break-even sales (units) for the current year. units 4. Compute the break-even sales (units) under the proposed program for the following year. units S. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $61,800,000 of operating income that was earned in the current year units 6. Determine the maximum operating Income possible with the expanded plant 7. If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the following year! 1. Based on the data given, would you recommend accepting the proposal 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 of future sales remain at the current level, the income from operations will increase Reject the proposal because the sales necessary to maintain the current inconse from operations would be below the current year sales Choose the correct