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. Its income statement is as follows: Sales Cost of goods sold Gross profit Expenses: $186,000,000 (100,000,000) $86,000,000 Selling expenses $14,000,000 Administrative expenses 11,000,000 Total expenses Operating income (25,000,000) $61,000,000 The division of costs between variable and fixed is as follows: Cost of goods sold Variable Fixed 70% 30% 75% 25% Selling expenses Administrative expenses 50% 50% Management is considering a plant expansion program for the following year that will permit an increase of $9,300,000 in yearly sales. The expansion will increase fixed costs by $4,500,000 but will not affect the relationship between sales and variable costs.