Break-even sales under present and proposed conditions Portmann Company, operating at foll capacity, sold 1,000,000 units at a price of 5187 per unit during the current year. Its incorne statement is as follows. The division of costs between variable and fixed is as follows: Management is considering a plant expansion program for the following vear that will permit an increase of st1,220,000 in yearly sales, The expansico will norease fixed costs by $4,500,000 but will not affect the relotionship between sales and vanable costs. Required: 1. Determine the total vanable costs and the total fixed costs for the current vear. Total vatiable costs 1 Total fred costs $ 2. Determine (a) the vait variable cost and (b) the unit contribution margin for the current vear Unt variable costs Unit contributon margins 3. Comeute the break-eren soles (units) for the current year. Latits 4. Compute the breakeven sales (units) under the proposed program for the fotbowng yeac unts 5. Determine the amaint of soles (units) that weuld be necessacy under the proposed program to realin the 360,400,000 of epergeng income that was narned in the current yeac. units 6. Determine the maximum eperating income possible wath the expanded tolant 7. If the proposel is accepted and sales remain at the current ierel, what wat the eperatieg income or loss be for the following vear? 8. Baud on the data given mould you recommend accepoing the proposal? a. In favor of the proposal becouse of the reduction in breek-even point. b. In tevor of the proposal because of the possibity ef increasing income from spermen. c. In taver of the pepposel becaute of the increase in treak-tven point. d. Reject the proposal becouse if future sales remen at the current levet, the income from operations will increase. e. Aeject the proposal becouse the sales necestary to maintain the carrent income from operationt would be below the current vear salen. Coobe the correct anwer