Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $186 per unit during the current year. Ita income statement is as follows: The division of costs between variabie and fived is as follows: Manjgement is considering a plant expansion program for the following vear that wa permit an increase of \$13,020,000 in yeary sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between soles and variable couts. Requitred: 2. Determine the total variable cous and the total fixed costs for the current year. Total variable coiss Determine the total variable costs and the total fixed costs for the current year. 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. units 4. Compute the break-even sales (units) under the proposed program for the following year: units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $62,000,000 of operating incame that was earned in the current veat: units 6. Determine the maximum operating income possible with the expanded plant. 3 x 7. If the probosat is accepted and sales remain at the current level, what will the operating income or loss be for the following vear? B. Based on the data given, would you recommend accepting the proposal? a. In favor of the proposal because of the reduction in break-even point. b. In favor of the proposal because of the possibility of increasing income from operations. c in fover of the proposal because of the increase in break-even point. d. Reject the proposal because if future soles remain at the current level, the income from operations will increase