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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

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 122,850 units at a price of $99 per unit during the current year. Its income statement for the current year is as follows:

Sales $12,162,150
Cost of goods sold 6,006,000
Gross profit $6,156,150
Expenses:
Selling expenses $3,003,000
Administrative expenses 3,003,000
Total expenses 6,006,000
Income from operations $150,150

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 $990,000 in yearly sales. The expansion will increase fixed costs by $99,000, but will not affect the relationship between sales and variable costs.

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

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