PR 21-3A

Cost of goods sold Selling expenses Administrative expenses 809% 75% 70% Fixed 20% 25% 30% m for the following year will permit an increase of $3,625,000 in yearly sales. The expansion wil costs by $1,000,000 but will not affect the relationship between sales and vari Instructions Determine the total variable costs and the total fixed costs for the current yea 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year 3. Compute the break-even sales (units) for the current year 4. Compute the break-even sales (units) under the proposed program for the following year ermine the amount of sales (units) that would be necessary under the proposed progra to realize the $4,400,000 of income from operations that was earned in the current y Determine the maximum 5. Det 6. income from operations possible with the expanded plant. 7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year? .Based on the data given, would you recommend accepting the proposal? Explain. PR 21-3A Break-even sales and cost-volume-profit chart OBJ. 3, 4 For the coming year, Cleves Company anticip able cost of $60, and fixed costs of $480,000 Instructions 1. Compute the anticipated break-even sales (units). 2. Compute the sales (units) required to realize a target profit of $240,000. 3. Constru ct a cost-volume-profit chart, assuming maximum sales of 20,000 units within the relevant range. 4. Determine the probable income (loss) from operations if sales total 16,000 units PR 21-4A Break-even sales and cost-volume-profit chart OBJ. 3,4 Last year, Hever Inc. had sales of $500,000, based on a unit selling price of $250. The ariable cost per unit was $175, and fixed costs were $75,000. The maximum sales withir lever Inc.'s relevant range are 2,500 units. Hever Inc. is considering a proposal to spen n additional $33,750 on billboard advertising during the current year in an attempt t crease sales and utilize unused capacity structions Construct a cost-volume-profit chart indicating the break-even sales for last year. Verit your answer, using the break-even equation. Using the cost-volume-profit chart prepared in part (1), determine (a) operations for last year and (b) the maximum income from operations that could ha been realized during the year. Verify your answers using the mathematical approa to cost-volume-profit analysis