Greak-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 500,000 units at a peice of $94 per unit during the current year, Its income statement is as folioas: The division of costs between variable and fased is as follows: Management is considering a plant expansion program for the following year that will permit an increase of 43,760,000 in yearly salei. The exponsioo will inerease fred costs by 51,600,000 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 Management is considering a plant expansion program for the following year that will permit an increase of 53,760,000 in yearly sales. The expansion will increase fixed costs by $1,800,000 but will not affect the relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total foced costs for the current yeac. 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost Unit contribution margin 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 reakize the 515,000,000 of income from operations that was earmed in the current year. units 6. Determine the maximum income from coerations possible with the expanded plant. 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? B. Based on the data given, would you recommend accepting the proposal? a. In favor of the proposal because of the reduction in breakeven point. h. In fawar of the oroonsal because of the possibility of increasine income from operations. 2. Decermine (a) the unut variable cost and (b) the un contribution margin for the current vear. 3. Combute the break-even sales (units) for the current year. umits 4. Compute the break-even sales (unts) under the peoposed program for the following year. units in the curfent 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 will the incomse or loss from operaboni be for the follawing 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 faver 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 femain at the current level, the income from ogerations will increare. e. Reject the proposal because the sales necessary to maintain the current income from operations would be below the ourrent year sales. Choose the corfect answef