Management is considering a plant expansion program that will permit an increase of $594,000 in yearly sales. The expansion will increase fixed costs by $59,400, but will not affect the relationship between sales and variable costs. 12. PR.19-02A.ALGO (Algorithmic) Determine the amount of sales (units) that would be necessary under Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 79,650 units at a price of $99 per unit during the current year. Its income statement for the current year is as follows: Sales Cost of goods sold Gross profit Expenses $7,885,350 3,894,000 $3,991,350 Selling expenses $1,947,000 Administrative expenses 1,947,000 Total expenses 3,894,000 Income from operations $97,350 The division of costs between fixed and variable is as follows: Variable Fixed 70% Cost of goods sold Selling expenses Administrative expenses 30% 75% 25% 50% 50% 4. Compute the break-even sales (units) under the proposed program for the following year. Enter the final answers rounded to the nearest whole number units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $97,350 of income from operations that was earned in the current year Enter the final answers rounded to the nearest whole number units 6. Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar. what will the income or loss from operati 7. If the proposal is accepted and sales remain at the current level, nearest dollar ons be for the following year? Enter the final answer rounded to the 8. 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 c. In favor of the proposal because of the increase in break-even point. d. Reject the proposal because if future sales remain at the current level, the income from operations will increase. e. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales Choose the correct