Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 131,600 units at a price of $105 per unit during the current year. Its income statement is as follows: Sales Cost of goods sold $13,818,000 4,900,000 Gross profit Expenses: Selling expenses $2,450,000 Administrative expenses 1,470,000 Total expenses $8,918,000 3,920,000 $4,998,000 Income from operations 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 $1,260,000 in yearly sales. The expansion will increase fixed costs by $168,000, but will not affect the relationship between sales and variable costs.