Darby Company, operating at full capacity, sold 139,000 units at a price of $51 per unit during the current year. Its income statement is as follows: Sales $7,089,000 Cost of goods sold 2,516,000 Gross profit $4,573,000 Expenses: Selling expenses $1,258,000 Administrative expenses 748,000 Total expenses 2,006,000 Income from operations $2,567,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 60% 40% Selling expenses 50% 50% Administrative 30% 70% expenses Management is considering a plant expansion program for the following year that will permit an increase of $561,000 in yearly sales. The expansion will increase fixed costs by $74,800, 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 2,363,000 Total fixed costs $ 2,159,000 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost 17 Unit contribution margin 34 3. Compute the break-even sales (units) for the current year. 63,500 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 $2,567,000 of income from operations that was earned in the current year. units 6. Determine the maximum income from operations possible with the expanded plant. $ 7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year? $ Income 8. Based on the data given, would you recommend accepting the proposal