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I just need 6. and 7. Break Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a

I just need 6. and 7. image text in transcribed
image text in transcribed
Break Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $190 per unit during the current year. Its income statement is as follows: Sales $190,000,000 Cost of goods sold (101,000,000) Gross profit $89,000,000 Expenses Selling expenses $16,000,000 Administrative expenses 14,600,000 Total expenses (30,600,000) Operating income $58,400,000 The division of costs between die and feed is as follows Variable Cost of goods sold 709 30% Selling expenses 754 25% Administrative 50% 5046 expenses Management is considering a plant expans program for the following year that will permit an increase of 511,400,000 in yearly sales. The pasion will created out by $1,000,000 but will not affect the relations between sales and variable costs Requiredi 1. Determine the total variable costs and the total fixed costs for the current year Total variable costs 90,000,000 1. Determine the total variable costs and the total fixed costs for the current year Total variable costs 90,000,000 Totalfixed costs 41,600,000 2. Determine (a) the unit variable cont and (b) the unit contribution maroin for the current year. Unit variable cost 90 Unit contribution margin 100 3. Compute the break even sales (units) for the current year. 416,000 units 4. Compute the break-even sabes (ots) under the proposed program for the following year, 456,000 units 3. Determine the amount of sales (units) that would be necessary under the propoved program to realize the $98,400,000 of operating income that we are in the curreny 1,040,000 6. Determine the mwamumosincating income possible with the expanded plant 7. It the proposals accepted and sales remain at the current level, what will the operating income or low be for the following year? Income 3. 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 favor of the proposal because of the possibility of increasing income from operations In favor of the proposal because of the increase in break even point d. Reject the proposal because of future sales remain at the current level, the income from operations will increase

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