Question
Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity,
Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 90,450 units at a price of $93 per unit during the current year. Its income statement for the current year is as follows: Sales Cost of goods sold Gross profit Expenses: $8,411,850 4,154,000 $4,257,050 Selling expenses $2,077,000 Administrative expenses 2,077,000 Total expenses Income from operations 4,154,000 $103,850 The division of costs between fixed and variable is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% Administrative expenses 50% 50% Management is considering a plant expansion program that will permit an increase of $651,000 in yearly sales. The expansion will increase fixed costs by $65,100, 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. Enter the final answers rounded to the nearest dollar.
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