Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $188 per unit during the current year. Its income statement is as follows: Sales $188,000,000 Cost of goods sold (100,000,000) $88,000,000 Gross profit Expenses: Selling expenses $16,000,000 Administrative expenses 12,000,000 Total expenses Operating income (28,000,000) $60,000,000 The division of costs between variable and fixed is as follows: Cost of goods sold Selling expenses Variable Fixed 70% 30% 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program for the following year that will permit an increase of $11,280,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs.