Part 4 CVP Analysis Seths Airway Cleaning Services, operating at full capacity, sold 10,000 units at a price of $175 per unit during the year. Their income statement is as follows: Sales ............................................... $1,750,000 Cost of goods sold ............................ 1,450,000 Gross Profit ........................................ $300,000 Expenses: Selling expenses ..................... $53,000 Administrative expenses .......... $47,000 Total Expenses ........................................................ $100,000 Income from operations ........................................... $200,000 The division of costs between fixed and variable is as follows: Fixed Variable Cost of goods sold 45% 55% Selling expenses 25% 75% Administrative expenses 50% 50% REQUIRED: 1. Determine the total fixed costs and total variable costs for the year. 2. Determine the unit variable cost and the unit contribution margin for the year. 3. Compute the break-even sales units for the year. The marketing manager has developed a brand extension and is wondering how the new product will affect profitability. The key figures are: a. Projected sales increase $500,000 b. Fixed costs will go up $200,000 c. Variable costs will be unchanged in the short term. 4. Compute the break-even sales units under the proposed program.

5. Compute the amount of sales (units) that would be necessary under the proposed program to realize the $200,000 that was earned during the year.