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 95,850 units at a price of $48 per unit during the current year. Its income statement for the current year is as follows:

Sales$4,600,800

Cost of goods sold2,272,000

Gross profit$2,328,800

Expenses:Selling expenses$1,136,000

Administrative expenses 1,136,000

Total expenses2,272,000

Income from operations$56,800

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 $384,000 in yearly sales. The expansion will increase fixed costs by $38,400, but will not affect the relationship between sales andvariable costs.

Required:

1.Determine the total variable costs and thetotal fixed costsfor the current year. Enter the final answers rounded to the nearest dollar.

Total variable costs$______Total fixed costs$_______

2.Determine (a) the unit variable cost and (b) theunit contribution marginfor the current year. Enter the final answers rounded to two decimal places.

Unit variable cost$____Unit contribution margin$_______

3.Compute the break-even sales (units) for the current year. Enter the final answers rounded to the nearest whole number.

_______units

4.Compute the break-even sales (units) under the proposed program for the following year. Enter the final answers rounded to the nearest whole number.

_______units

5.Determine the amount of sales (units) that would be necessary under the proposed program to realize the $56,800 of income from operations that was earned in the current year. Enter the final answers rounded to the nearest whole number.

_______units

6.Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar.

$________