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Break$-$Even Sales Under Present and Proposed Conditions

Darby Company, operating at full capacity, sold $150,400$ units at a price of $$132$ per unit during the current year. Its income statement is as follows:

Sales $$19,852,800$

Cost of goods sold $7,040,000$

Gross profit $$12,812,800$

Expenses:

Selling expenses $$3,520,000$

Administrative expenses $2,112,000$

Total expenses $5,632,000$

Income from operations $$7,180,800$

The division of costs between variable and fixed is as follows:

Variable Fixed

Cost of goods sold $60\%40\%$

Selling expenses $50\%50\%$

Administrative expenses $30\%70\%$

Management is considering a plant expansion program for the following year that will permit an increase of $$1,584,000$ in yearly sales. The expansion will increase fixed costs by $$211,200,$ 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.

Total variable costs $fill in the blank $1$

Total fixed costs $fill in the blank $2$

$2.$ Determine $($a$)$ the unit variable cost and $($b$)$ the unit contribution margin for the current year.

Unit variable cost $fill in the blank $3$

Unit contribution margin $fill in the blank $4$

$3.$ Compute the break$-$even sales $($units$)$ for the current year.

fill in the blank $5$

units

$4.$ Compute the break$-$even sales $($units$)$ under the proposed program for the following year.

fill in the blank $6$

units

$5.$ Determine the amount of sales $($units$)$ that would be necessary under the proposed program to realize the $$7,180,800$ of income from operations that was earned in the current year.

fill in the blank $7$

units

$6.$ Determine the maximum income from operations possible with the expanded plant.

$fill in the blank $8$

$7.$ If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?

$fill in the blank $9$

Income