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Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 144,700 units at a price of $102 per unit during

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Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 144,700 units at a price of $102 per unit during the current year. Its income statement is as follows: Sales Cost of goods sold Gross profit Expenses: Selling expenses $2,618,000 Administrative expenses 1,564,000 $14,759,400 5,236,000 $9,523,400 Total expenses 4,182,000 $5,341,400 Income from operations The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 60% Selling expenses 50% 40% 50% Administrative expenses 30% 70% Management is considering a plant expansion program for the following year that will permit an increase of $1,326,000 in yearly sales. The expansion will increase fixed costs by $176,800, 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 4,919,800 Total fixed costs 4,498,200 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost 34

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