Howard Industries Inc., operating at full capacity, sold 64,000 units at a price of $45 per unit during the current year. Its income statement is as follows: Sales Cost of goods sold Gross profit... Expenses: Selling expenses Administrative expenses. Total expenses... Income from operations $400,000 387,500 The division of costs between variable and fixed is as follows: Cost of goods sold Selling expenses Administrative expenses Variable 75% 60% 80% $2,880,000 1,400,000 $1,480,000 787,500 $ 692,500 Fixed 25% 40% 20% How Sm Management is considering a plant expansion program for the following year that will permit an increase of $900,000 in yearly sales. The expansion will increase fixed costs by $212,500 but will not affect the relationship between sales and variable costs. Instructions 1. Determine the total fixed costs and the total variable costs for the current year. 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. 3. Compute the break-even sales (units) for the current year.

Howard Industries Inc., operating at full capacity, sold 64,000 units at a price of $45 per unit during the current year. Its income statement is as follows: The division of costs between variable and fixed is as follows: Management is considering a plant expansion program for the following year that will permit an increase of $900,000 in yearly sales. The expansion will increase fixed costs by $212,500 but will not affect the relationship between sales and variable costs. Instructions 1. Determine the total fixed costs and the total variable costs for the current year: 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year: 3. Compute the break-even sales (units) for the current year