Break-even sales under present and proposed conditions.

Postmann Company, operating at full capacity, sold 1,000,000 units at a price of $188 per unit during the current year. Its income statement is as follows: Please, help.

Break-even sales under present and proposed conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $188 per unit during the current year, Its income statement is as fallowsi The division of costs between variabie and fixed is as foliows: Management is considering a plant expansion program for the following year that will permit an increase of $11,280,000 in yearly sales. The expansion wiil increase fixed costs by 55,000,000 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 1 Total fixed costs $ 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost 5 Unit contribution margin $ 3. Compute the break-even sales (units) for the current year. units 4. Compute the break-even soles (units) under the proposed program for the following year. units 5. Determine the amount of saies (units) that would be necessary under the proposed program to realize the 560,000,000 of operating income that was earned in the current year. units 6. Determine the maximum operating income possible with the expanded plant. 7. If the proposal is-accepted and sales remain at the current level, what will the operating income or loss be for the foliowing year? 3. Compute the break-even sales (units) for the current year. units 4. Compute the break-even 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 $60,000,000 of operating income that was sarned in the current year. units 6. Determine the maximum operating income possible with the expanded plant. 7. If the proposal is accepted and sales remain at the current level, what wit the operating income or loss be for the foliowing year? 8. Based on the data given, would you recommend accepting the proposal? a. In favor of the proposal because of the reduction 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 point. d. Reject the proposat because if future sales remain at the current level, the income from operations will increase. e. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales. Choose the correct