Break-Even Sales Under Present and Proposed Conditions Battonkill Company, operating at full capacity, sold 127,900 units at a price of $102 per unit during the current year. Its income statement for the current year is as follows: Sales Cost of goods sold Gross profit Expenses: $13,045,800 4,624,000 $8,421,800 Selling expenses $2,312,000 Administrative expenses 1,394,000 Total expenses 3,706,000 Income from operations $4,715,800 The division of costs between fixed and variable is as follows: Fixed Variable 40% Cost of goods sold Selling expenses Administrative expenses Management is considering a plant expansion program that will permit an increase of $1,224,000 in yearly sales. The expansion will increase fixed costs by $163,200, but will not affect the relationship between sales and variable costs. 60% 5096 50% 70% 30%