Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 167,200 units at a price of $111 per unit during the

Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 167,200 units at a price of $111 per unit during the current year. Its income statement is as follows: Sales $18,559,200 Cost of goods sold 6,586,000 Gross profit $11,973,200 Expenses: Selling expenses $3,293,000 Administrative expenses 1,961,000 Total expenses 5,254,000 Income from operations $6,719,200 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 60% 40% Selling expenses 50% 50% Administrative expenses 30% 70% Management is considering a plant expansion program for the following year that will permit an increase of $1,665,000 in yearly sales. The expansion will increase fixed costs by $222,000, 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 $ NEED THIS - please show work

I have the total fixed cost so I do not need that.

2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.

Unit variable cost $ NEED THIS - please show work

Unit contribution margin $ NEED THIS - please show work

3. Compute the break-even sales (units) for the current year.

NEED THIS - please show work

4. Compute the break-even sales (units) under the proposed program for the following year.

NEED THIS - please show work

5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $6,719,200 of income from operations that was earned in the current year. units

NEED THIS - please show work

6. Determine the maximum income from operations possible with the expanded plant.

NEED THIS - please show work

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Accounting St Louis Community College At Meramac

Authors: Phillips/Libby/Libby

3rd Edition

007745412X, 978-0077454128

More Books

Students also viewed these Accounting questions

Question

Construct all the symmetric BIBDs for t=3, . . . 6.

Answered: 1 week ago

Question

Is SHRD compatible with individual career aspirations

Answered: 1 week ago