Help with question 6.

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 125,550 units at a price of $54 per unit during the current year. Its income statement for the current year is as follows:

Sales			$6,779,700
Cost of goods sold			3,348,000
Gross profit			$3,431,700
Expenses:
Selling expenses	$1,674,000
Administrative expenses	1,674,000
Total expenses			3,348,000
Income from operations			$83,700

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 $540,000 in yearly sales. The expansion will increase fixed costs by $54,000, 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. Enter the final answers rounded to the nearest dollar.

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. Enter the final answers rounded to two decimal places.

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. Enter the final answers rounded to the nearest whole number. fill in the blank 5 units

4. Compute the break-even sales (units) under the proposed program for the following year. Enter the final answers rounded to the nearest whole number. fill in the blank 6 units

5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $83,700 of income from operations that was earned in the current year. Enter the final answers rounded to the nearest whole number. fill in the blank 7 units

6. Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar. $fill in the blank 8