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can you please solve reak-even sales under present and proposed conditions: ortmann Company, operating at full capacity, sold 1,000,000 units at a price of $187
can you please solve
reak-even sales under present and proposed conditions: ortmann Company, operating at full capacity, sold 1,000,000 units at a price of $187 per unit during the current year, Its income statement is as follows: The division of costs between variable and foxed is as follows: Management is cons/dering a plant expansion pregram for the followin o year that will permit an increase of $9,350,000 in yearly sales. The expansion will increase fixed costs by $4,500,000 but will not affect the retabonship between sales and variable conts. Required: 1. Determine the total varioble costs and the total fiked costs for the current yeor. Total variable costs 1 Total fixed costs 2. Determine (a) the unit variabien cost and (b) the unit conthibution inurgin for the current vean: Unit valable costs Total variable costs 5 -Total foced costs s 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost s Unit contribution margin \$ 3. Compute the break-even sales (units) for the current year. units 4. Compute the brabk-even sales (units) under the -proposed program for the following year: units 5. Determine the omount of soles (units) that would be necessary under the proposed program to realize the $59,700,000 of operating income that was earned in the current vear. units 6. Determine the mavimum operating incorne potsible with the expanded piant: 7. If the broposal is accepted and sales remain at the current level, what will the eperating income or loss be far the foltowing vear? 3 8. Bssed on the data given, would you recommend accepting the proposar? a. In favor of the proposal because of the reduction in break-even point: b. In fovor of the proposal becasse of the possibility of increasing income from dperations. c. In favor of the proposal becaus of the increase in break enen point. d. Reject the proposal because if future fales remain at the current level, the income from operations wis increave. e. Feject the proposal because the soles necessary to maintain the current income from operations would be below the current year sales: Choose the correct Step by Step Solution
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