Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 110,800 units at a price of $54 per unit during the current year. Its income statement is as follows: Sales Cost of goods sold $5,983,200 2,124,000 Gross profit $3,859,200 Expenses: Selling expenses $1,062,000 Administrative expenses 630,000 Total expenses 1,692,000 $2,167,200 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 30% 70% expenses Management is considering a plant expansion program for the following year that will permit an increase of $486,000 in yearly sales. The expansion will increase fixed costs by $64,000, but will not affect the relationship between sales and variable costs.