Break-Even-Sakes Under Present and Proposed Conditions The division of costs between varkble and fixed is as follows: Management is considering a plant expansion program ror the tollown fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs. Atequired 1. Determine the total variable costs and the total foxed costs for the aurrenk vear. increase fired costs by $5,000,000 but wil not affect the reiationship betaeen sales and varable costs. Requiredt 1. Deteemioe the total variable costs and the total fixed costs fer the curent year. 2. Determine (a) the und variable cost and (b) the unit cond divhus mar gn far that curment year Whit variable cost Unit contribstoon margin 3. Compute the breakreven saies (units) tor the current year. urves 4. Compute the break-etyen sales (units) under the prososed program for the following year. unite earned in the current year, units 6. Determine the maximum operating income persible with the expanded plant. 7. If the proposal is accepted and sales remain at the current level, what wid the operating income or ioss be for the folnning rear? B. Based on the data givep, would you recommend accepting the proposar? 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 559,000,000 of operating incom 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 following 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 proposal 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 saies. Choose the correct