eBook Show Me How Break-Even Sales Under Present and Proposed Conditions BeeGee Company, operating at full capacity, sold 150,000 units at a price of $116 per unit during the current year. Its income statement is as follows Sales Cost of goods sold Gross profit Expenses: 17,400,000 6,000,000 11,400,000 Seling expenses Administrative expenses 3,000,000 $4,000,000 Total expenses 7,000,000 $4,400,000 Income from operations ) The division of costs between variable and fed is as follows: Variableixed Cost of goods sold 80% 75% 70% 20% 25% 30% Selling expenses expenses Management is considering a plant expansion program for the following year that will permit an increase of $3,625,000 in yearly sales. The expansion will increase fixed costs by $1,000,000 but wil 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 Check My Work Previous eBook Show Me ow Calulator Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year year units 4. Compute the break-even sales (units) under the proposed program for the following year 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $4,400,000 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 wit the income or loss from operations 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 wilt increase e. Reject the proposal Choose the correct answer because the sales eecessary to maintan the current income from operations would be below the current year sales Previous Check My Work