BreakeEven Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 157,800 units at a price of $66 per unit during the current year. Its income statement is as follows: Sales $10,414,300 Cost of goods sold 3,696,000 Gross profit $6,718,800 Expenses: Selling expenses $1,848,000 Administrative expenses 1,100,000 Total expenses 2,948,000 Income from operations $3,770,800 ) The division of costs between variable and xed is as follows: Variable Fixed Cost of goods sold 60% 40% Selling expenses 50% 50% Administrative 30% ?0% expenses Management is considering a plant expansion program for the following year that will permit an increase of $924,000 in yearly sales. The expansion will increase fixed costs by $123,200, 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. 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs C 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit contribution margin Unit variable cost $[:l 3. Compute the breakeven sales (units) for the current year. 4. Compute the breakeven sales (units) under the proposed program for the following year. 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $3,770,800 of income from operations that was earned in the current yeah 6. Determine the maximum income from operations possible with the expanded plant. 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? 4:] ._. 8. Based on the data given, would you recommend accepting the proposal? a. In favor of the proposal because of the reduction in breakeven point. b. In favor of the proposal because of the possibility of increasing income from operations