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I just need 6 and 7 completed everything else is done. Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold
I just need 6 and 7 completed everything else is done.
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 Cost of goods sold Gross profit Expenses Selling expenses $190,000,000 (102,000,000) $88,000,000 515,000,000 Administrative expenses 19,700,000 Total penses (29,700,000 Operating income 559,300,000 The division of costs between and is as follows Variable Fixed Cost of goods sold 701 20 75 25 Selling expenses administrative expenses SO 50 Management is considering a plant expansion program for the following year that will permit an increase of $13,300,000 in yearly sales. The expansion will increase fixed costs by $3,000,000 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 Total variable costs 90,000,000 Total fixed costs 41.700,000 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current vear. 90 Unit Variable cost Unit contribution margin 100 3. Compute the break even sales (units for the current year 417,000 units 4. Compute the break even sales (units under the proposed program for the following year 447,000 units 5. Determine the amount of sales Cunitstraat would be cecessary under the proposed program to realize the 58,300,000 of operating income that was earned in the current year 1,030,000 units 6. Determine the maximum operating income possible with the expanded planti 7. If the proposal is accepted and sales remain at the cutrent level what will the operating income or loss be for the following year? Income Step by Step Solution
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