Break-even sales under present and proposed conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of 5188 per unit during the current year. Its income stateinent is as follows: The division of costs between variable and fived is as follows: Management is considering a plant expansion program for the following year that wilt permit an increase of 511,280,000 in yearly sales. The expansion wil increase fixed costs by 54,000,000 but wil not affect the relationship between sales and variable costs. 2. Determine the total variable costs and the total foxed costs for the current year: Total variable costs Total foced costs \$ 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the curtent year: Unit variable cost 1 Unit contribution margin : 3. Compute the break-even sales (units) for the eurrent year. units 4. Compute the breakeven sales (units) under the proposed program for the following year. units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $59,100,000 of operating income that was earned in the current vear units 6. Determine the maximum operating income possible with the exponded plant. 1 7. If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the rollowing year? 3. Based on the data glven, would you rocommend accepting the proposal? a. In faver of the propesal because of the redoction in break-even point. b. In favor of the proposal because of the possibility of increasing income from operations. c. In favor of the proposal because of the increase in break-even peint. d. Reject the proposal because if future sales remain at the current level, the income from operabons nill increase. 2. Reject the proposal because the sales necescary to maintain the current income from operations would be beloe the ourrent year kaind Choose the correct