Selling expenses 75% 25% Administrative expenses 50% 50% variable costs. Management is considering a plant expansion program for the following year that will permit an increase of $11,280,000 in yearly sales. The expansion will increase fixed costs by $3,500,000 but will not affect the relationship between sale Required: 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs 88,000,000 Total fixed costs 40,900,000 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost 88 Unit contribution margin 100 3. Compute the break-even sales (units) for the current year. 409,000 | units 4. Compute the break-even sales (units) under the proposed program for the following year. 444,000 V units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $59,100,000 of operating income that was earned in the current year. 1,035,000 units 6. Determine the maximum operating income possible with the expanded plant. 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? X Income 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. n operations