BreakeEven 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 Its income statement is as follows: Sales $186,000,000 Cost of goods sold (99,000,000) Gross profit $8?,000,000 Expenses: Selling expenses $16,000,000 Administrative expenses 9,400,000 Total expenses (25,400,000) Operating income $61,600,000 > The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative 50% 50% expenses Management is considering a plant expansion program for the following year that Will permit an increase of $9,300,000 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 xed costs for the current year. Total variable costs 5:] X Total xed costs 5:] X 2. Determine (a) the unlt varlable cost and (b) the Llnlt contribution margin for the current year. Unit variable cost $l:l Unit contribution margin $:] 3. Compute the breakeeven sales (units) for the current year. 4. Compute the break-even 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 $61,600,000 of operating income that was earned in the current year. 6. Determine the maximum operating lncor'ne possible with the expanded plant. $:l 7. If the proposal is accepted and sales remaln at the current level, what wwll the operating lncome or loss be for the following year