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eBook Show Me How Calculator Print tem Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a

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eBook Show Me How Calculator Print tem Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $186 per unit during the current year. Its income statement is as follows: Sales Cost of goods sold $186,000,000 199,000,000) $87,000,000 Gross profit Expenses: Selling expenses $15,000,000 Administrative expenses 10,900,000 Total expenses (25,900.000) Operating income 561,100,000 The division of costs between Variable and he is as follows: Fixed Variable 70% Cost of goods sold 30 Selling expenses 25 Administrative expenses 50% son Management is considering a plant expansion program for the following year that will permit an increase of $11,160,000 in yearly sales. The expansion Increase fed costs by $3,000,000 but will not affect the relationship between sales and variable costs. Required: eBook Show Me How Calculator Printem Required: 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs $ 86,000,000 Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost $ 86 Unit contribution margin $ 100 3. Compute the break-even sales (units) for the current year. 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 $61,100,000 of operating income that was earned in the current year. units 6. Determine the maximum operating income possible with the expanded plant. 7. If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the following year? Income s 8. Based on the data diven would you recommend acting the proposal? Check My Work Previous Next >

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