Kearney Company, operating at full capacity, sold $178,600$ units at a price of $$126$ per unit during

$20$Y$5.$ Its income statement for $20Y5$ is as follows:

Expenses:

Selling expenses

$$3,990,000$

Administrative expenses

$2,394,000$

Total expenses

$(6,384,000)$

Operating income

$$8,139,600$

The division of costs between fixed and variable is as follows:

Management is considering a plant expansion program that will permit an increase of $$2,016,000$

units at $$126$ per unit$)$ in yearly sales. The expansion will increase fixed costs by $$268,800,$

but will not affect the relationship between sales and variable costs.

$**$Instructions:

$1.$ Compute the break$-$even sales $($units$)$ under the proposed program.

$2.$ Determine the amount of sales $($units$)$ that would be necessary under the proposed program to realize the $$8,139,600$ of operating income that was earned in $20$Y$5.$

$3.$ Determine the maximum operating income possible with the expanded plant.

$4.$ If the proposal is accepted and sales remain at the $20$Y$5$ level, what will be the operating income or loss for $20$Y$6?$