Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 500,000 units at a price of $94 per unit during the current year. Its income statement is as follows: Sales Cost of goods sold Gross profit $47,000,000 25,000,000 $22,000,000 Expenses: Selling expenses $4,000,000 Administrative expenses 3,000,000 Total expenses Income from operations: 7,000,000 $15,000,000 The division of costs between variable and fixed is as follows: Cost of goods sold Selling expenses Variable Fixed 70% 30% 75% 25% 50% 50% Administrative expenses Management is considering a plant expansion program for the following year that will permit an increase of $3,760,000 in yearly sales. The expansion will increase fixed costs by $1,800,000 but will not affect the relationship between sales and variable costs. Required: Check My Work Previous