D2L Module Four - ACC-202-R6914 N X D21 4-1 Problem Set: Module Four - / x CengageNOWv2 | Online teachin X *Search Results | Course Hero x * CH 19 HW.docx : APA 2071 : Polk X G ortmann Company, operating at X C A v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker =&takeAssignmentSessionLocator=&inprogress=false Problem Set: Module 4 1 eBook Show Me How 1. BE.06.02.ALGO Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $189 per unit during the current year. Its income statement is as follows: 2. EX.06.01 Sales $189,000,000 3. PR.06.02A.ALGO Cost of goods sold (100,000,000) Gross profit $89,000,000 4. BE.06.03.ALGO Expenses Selling expenses $14,000,000 Administrative expenses 17,000,000 Total expenses (31,000,000) Operating income $58,000,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative 50% 50% expenses Management is considering a plant expansion program for the following year that will permit an increase of $9,450,000 in yearly sales. The expansion will increase fixed costs by $4,500,000 but will not affect the relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. units Camnuts the hronke avon color (unite) under the and program for the following voor Check My Work Next Progress: 3/4 items Previous Assignment Score: 25% All work saved. Email Instructor Save and Exit Submit Assignment for GradingD2L Module Four - ACC-202-R6914 N X DEL 4-1 Problem Set: Module Four - / X CengageNOWv2 | Online teachin X * Search Results | Course Hero x * CH 19 HW.docx : APA 2071 : Polk X G ortmann Company, operating at X + + C v2.cengagenow.com/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false Problem Set: Module 4 1 eBook Show Me How Administrative 50% 50% 1. BE.06.02.ALGO expenses Management is considering a plant expansion program for the following year that will permit an increase of $9,450,000 in yearly sales. The expansion will increase fixed costs by $4,500,000 but will not affect the relationship between sales and 2. EX.06.01 variable costs. 3. PR.06.02A.ALGO Required: 4. BE.06.03.ALGO 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost Unit contribution margin 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 $58,000,000 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 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 sales. Choose the correct answer. Check My Work Progress: 3/4 items Previous Next Assignment Score: 25% All work saved. Email Instructor Save and Exit Submit Assignment for Grading