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I need assistance with # 5 & 6 Break-Even Sales Under Present and Proposed Canditions Portmann Company, operating at full capacity, sold 1,000,000 units at
I need assistance with # 5 & 6
Break-Even Sales Under Present and Proposed Canditions Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $189 per unit during the current year. Its incorne statement is as follows: Sales $189,000,000 $ Cost of goods sold (101,000,000) Gross profit 188,000,000 Expenses: Selling expenses $11,000,000 Administrative expenses 15,600,000 Total expenses (29,600,000) Operating income $59,400,000 The division of casts between variable and fixed is as follows: Variable Fixed Cost of gouds sold 70% 30% Selling expenses 75% 25% Administrative 50% 50% expenses Management is considering a plant expansion program for the fallowing year that will permit an increase of $11,240,000 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 $ 89,000,000 Total Fixed costs 41,600,000 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Linit variable cost 89 Linit contribution margin $ 100 3. Compute the break even sales (units) for the current year. 416,000 urts 4. Compute the break-even sales (units) under the proposed program for the following year. 446,000 units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the 558,400,000 or operating income that was eamed in the current year. 1 Xunts 6. Determine the maximum operating Income possible with the expanded plant. 7 FHhr nenorcali aratan cinemain at the moment Imrl what the narration immor ince hr for the followinn var
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