Break Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $189 per unit during the current year Its income statement is as follows Sales$189,000,000Cost of goods sold(102,000,000)Gross profit$87,000,000Expenses Selling expenses$15,000,000Administrative expenses12,700,000Total expenses(27,700,000)Operating income$59,300,000 The division of costs betweenvariableandfixedis as follows VariableFixed Cost of goods sold70 30 Selling expenses75 25 Administrative expenses50 50 Management is considering a plant expansion program for the following year that will permit an increase of $9,450,000 in yearly sales The expansion will increase fixed costs by $3,500,000 but will not affect the relationship between sales and variable costs Required 1 Determine the total variable costs and the total fixed costs for the current year Total variable costs$fill in the blank 1 Total fixed costs$fill in the blank 2 2 Determine (a) the unit variable cost and (b) theunit contribution marginfor the current year Unit variable cost$fill in the blank 3 Unit contribution margin$fill in the blank 4 3 Compute the break even sales (units) for the current year fill in the blank 5 units 4 Compute the break even sales (units) under the proposed program for the following year fill in the blank 6 units 5 Determine the amount of sales (units) that would be necessary under the proposed program to realize the $59,300,000 of operating income that was earned in the current year fill in the blank 7 units 6 Determine the maximum operating income possible with the expanded plant $fill in the blank 8 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 $fill in the blank 9 8 Based on the data given, would you recommend accepting the proposal In favor of the proposal because of the reduction in break even point In favor of the proposal because of the possibility of increasing income from operations In favor of the proposal because of the increase in break even point Reject the proposal because if future sales remain at the current level, the income from operations will increase Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales

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Break Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $189 per unit during the current year  Its income statement is as follows  Sales$189,000,000Cost of goods sold(102,000,000)Gross profit$87,000,000Expenses Selling expenses$15,000,000Administrative expenses12,700,000Total expenses(27,700,000)Operating income$59,300,000 The division of costs betweenvariableandfixedis as follows  VariableFixed Cost of goods sold70 30 Selling expenses75 25 Administrative expenses50 50  Management is considering a plant expansion program for the following year that will permit an increase of $9,450,000 in yearly sales  The expansion will increase fixed costs by $3,500,000 but will not affect the relationship between sales and variable costs  Required  1  Determine the total variable costs and the total fixed costs for the current year  Total variable costs$fill in the blank 1 Total fixed costs$fill in the blank 2 2  Determine (a) the unit variable cost and (b) theunit contribution marginfor the current year  Unit variable cost$fill in the blank 3 Unit contribution margin$fill in the blank 4 3  Compute the break even sales (units) for the current year  fill in the blank 5 units 4  Compute the break even sales (units) under the proposed program for the following year  fill in the blank 6 units 5  Determine the amount of sales (units) that would be necessary under the proposed program to realize the $59,300,000 of operating income that was earned in the current year  fill in the blank 7 units 6  Determine the maximum operating income possible with the expanded plant  $fill in the blank 8 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  $fill in the blank 9 8  Based on the data given, would you recommend accepting the proposal  In favor of the proposal because of the reduction in break even point  In favor of the proposal because of the possibility of increasing income from operations  In favor of the proposal because of the increase in break even point  Reject the proposal because if future sales remain at the current level, the income from operations will increase  Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales

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Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at

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