Break Even Sales Under Present and Proposed Conditions Portmann Company operating at Cape sold 1,000,000 units at a price of $189 per ut during the current year. It income statement is as folio Sales $189,000,000 Cost of goods told (100,000,000) Grous profit 189,000,000 Expenses Selling expenses $14,000,000 Administrative expenses 17,000,000 Total penses (31,000,000) Operating income 558,000,000 The vision of costs between arteando Variable Fixed Cost of goods 70% 04 Selling essentes 25 Administrative 50 SOS Expenses Management conuldering a punt expansion program for the following year that will permit an increase 513,250,000 in years. The expansion will increase fixed costs by $4,500,000 but will not affect the relationship between wals and costs Required 1. Determine the total variable costs and the total costs for the current year. Total variable costs Variable Fired Cost of goods sold 70% JON Selling expenses 759 25 Administrative 504 50% expenses Management is considering plant expansion program for the ring year that will permt an increase of 411.230,000 in yearly sales. The paren will increase feed costs by 14.500,000 but will not affect the relationship between sales and variable costs Required 1. Determine the total variable costs and the totale costs for the current year Total variable costs Tot Rundt 2. Determine the unit Variable cost and (b) the contrary for the current year Unit vanable cost Unit contribution margin 3. Compute the events for the current year unts Camoute te trae sales (wyder the preveden for the following year 5. Detamine the amount of sales (un) that would be necessary under the proposed program to realize the 150,000,000 of operating contrat warnarned in the current year units 6. Determine the maximum operating income possible with the spanded punt Totaled costs 2. Determine (a) the unit variable cost and (b) the writorio margin for the current year Unit variable cost Unit contribution margin 2. Compute the break-even als units) for the current year 4. Compute the brukeren sales (units under the proposed program for the following your S. Determine the amount of sales (units) that would be necesary under the proposed program to raise the $50,000,000 of operating income that was earned in the current year units Determine the marimum operating income ponese with the expandedant the proposa in scepted and wes remain at the current , what is the operating income or less be for the towng year! Based on the data oven, would you recommend compting the proposal In favor of the propose because of the reduction in breven point b. In favor of the proposal because of the power of increasing income from operations In favor of the real because of the increase in Dresdevenim deciropout because it ture sales remain at the current level, the income from ons wil na e Reject the proposal because the sales necesary to mantan the current income from operations would be blew the current years Choose the correcta ebook 5 Reading List Show Me How Printem Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $189 per unit during the current year. Its income statement is as follows: Sales $189,000,000 Cost of goods sold (100,000,000) Grass pront $89,000,000 Expenses Selling expenses $14,000,000 Administrative expenses 17,000,000 Total expenses (31,000,000) Operating income $58,000,000 The division of costs between variable and fixed is as follows: Fixed Variable 70% 30% Cost of goods sold Selling expenses Administrative 75% 25% 50% 50% expenses Management is considering a plant expansion program for the following year that will permit an increase of $13,230,000 in yearly sales. The expansion will increase fixed costs by $4,500,000 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. Total variable costs Total fixed costs Variable Pined Cost of goods sold TON 30% Selling expenses 75% Administrative SO 50% espere Management concerning partner Program Penyert wie anno 13.220,000 in early. The wel ve do 14.400,000 t will not let relation between als and verables Required 1. Determine the total vars and the tota fue costs for the current yea Total variable costs Totalted costs 2. Detmone (as the untrabie cost and (b) the unten margin for the current Unt variable Unit contribution margin 3. compute the break-even sie uns for the current year 4. Compute me break-even sales funt) under the proposed program for the following ye. s. Determine the amount of sales (units) that we necessary under the proposed program to raise the $58,000,000 of cering income that was earned in the current year 6. Determine the maximum operating income possible with the expanded plant. Total et costs 2. Determine the unit variable cost and to the worn for the current year Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year units 4. Computer the break-even tales (unita) under the propound program for the following yan units 5. Determine the amount of ents) that would be necessary under the proposed program to raise the $50,000,000 of operating income that were in the current 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 wil the operating income or loss be for the following year? Income 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 ir 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 aperations would be below the current year sales Choose the correct