BreakEven 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 $186,000,000 Cost of goods sold (99,000,000) Gross profit $87,000,000 Expenses: Selling expenses $16,000,000 Administrative expenses 9,400,000 Total expenses (25,400,000) Operating income $61 600,000 ) The diVision of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative 50% 50% expenses Management is consu'lering a plant expansmn 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. 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs $:] Total fixed costs $:] 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. 4. Compute the break-even sales (units) under the proposed program for the followmg year. 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $61,600,000 of operating incorne that was earned in the current year. 6. Determine the maximum operating income possible with the expanded plant. $:l 7. If the proposal is accepted and sales remain at the current level, what Will the operating income or loss be for the following year