Sales

$$186,000,000$

$\frac{(102,000,000)}{?}$

$$84,000,000$

Cost of goods sold

Gross profit

Expenses:

Selling expenses

$$16,000,000$

Administrative expenses $,5,200,000$

Total expenses

$\backslash$table$[[(21,200,000)$

Management is considering a plant expansion program for the following year that will permit an increase of $$11,160,000$ in yearly sales. The expansion will increase fixed costs by $$3,000,000$ but will not affect the relationship between sales and variable costs.

Required:

Determine the total variable costs and the total fixed costs for the current year.

Total variable costs

Total fixed costs

$2.$ Determine $($a$)$ the unit variable cost and $($b$)$ the unit contribution margin for the current yeat

Unit variable cost

Unit contribution margin

$3.$ Compute the break$-$even sales $($units$)$ for the current year.

$$ units

$4.$ Compute the break$-$even sales $($units$)$ under the proposed program for the following year.

$x$ units

$5.$ Determine the amount of sales $($units$)$ that would be necessary under the proposed program to realize the $$62,800,000$ of operating income that was earned in the current year.

$x$ units

$6.$ Determine the maximum operating income possible with the expanded plant.

$

$x$

$7.$ If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the following year?