Spartan Company, operating at full capacity, sold 1,000,000 units at a price of $200 per unit during the current year. Its income statement is as follows:

Line Item Description	Amount	Amount
Sales		$200,000,000
Cost of goods sold		(110,000,000)
Gross profit		$90,000,000
Expenses:
Selling expenses	$15,000,000
Administrative expenses	14,000,000
Total expenses		(29,000,000)
Operating income		$61,000,000

The division of costs between variable and fixed is as follows:

Line Item Description	Variable	Fixed
Cost of goods sold	70%	30%
Selling expenses	75%	25%
Administrative expenses	50%	50%

Management is considering a plant expansion program for the following year that will permit an increase of $10,000,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs.

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

	COGS	Selling	Administrative	Total
Variable Costs
Fixed Costs

b. Work with the Contribution Margin and the Unit costs.

1. Determine the Contribution Margin.

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2. Determine the Unit Variable Costs.

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3. Determine the Unit Contribution Margin.

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c. Computer the Break-Even Sales (units) for the current year.

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d. Determine the Break-Even Sales (units) under the proposed program for the following year.

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e. Determine the Target Profit Sales (units) under the proposed program to realize the $61,000,000 of operating income that was earned in the current year.

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3. Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows:

Products	Unit Selling Price	Unit Variable Cost	Sales Mix
Laptops	$1,000	$500	40%
Tablets	600	300	60%

The estimated fixed costs for the current year are $3,192,000.

a. Determine the Unit Selling Price of the Overall Company Product, M.

b. Determine the Unit Variable Cost of the Overall Company Product, M.

c. Determine the Unit Contribution Margin of the Overall Company Product, M.

d. Determine the estimated units of sales of the overall company product, M, necessary to reach the Break-Even Point for the current year.

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e. Based on the Break-Even Sales (units) in part (d), determine the sales of both laptops and tablets for the current year.

Spartan Company, operating at full capacity, sold 1,000,000 units at a price of $200 per unit during the current year. Its income statement is as follows:

Line Item Description	Amount	Amount
Sales		$200,000,000
Cost of goods sold		(110,000,000)
Gross profit		$90,000,000
Expenses:
Selling expenses	$15,000,000
Administrative expenses	14,000,000
Total expenses		(29,000,000)
Operating income		$61,000,000

The division of costs between variable and fixed is as follows:

Line Item Description	Variable	Fixed
Cost of goods sold	70%	30%
Selling expenses	75%	25%
Administrative expenses	50%	50%

Management is considering a plant expansion program for the following year that will permit an increase of $10,000,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs.

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

	COGS	Selling	Administrative	Total
Variable Costs
Fixed Costs

b. Work with the Contribution Margin and the Unit costs.

1. Determine the Contribution Margin.

Formula	Numbers

2. Determine the Unit Variable Costs.

Formula	Numbers

3. Determine the Unit Contribution Margin.

Formula	Numbers

c. Computer the Break-Even Sales (units) for the current year.

Formula	Numbers

d. Determine the Break-Even Sales (units) under the proposed program for the following year.

Formula	Numbers

e. Determine the Target Profit Sales (units) under the proposed program to realize the $61,000,000 of operating income that was earned in the current year.

Formula	Numbers

3. Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows:

Products	Unit Selling Price	Unit Variable Cost	Sales Mix
Laptops	$1,000	$500	40%
Tablets	600	300	60%

The estimated fixed costs for the current year are $3,192,000.

a. Determine the Unit Selling Price of the Overall Company Product, M.

b. Determine the Unit Variable Cost of the Overall Company Product, M.

c. Determine the Unit Contribution Margin of the Overall Company Product, M.

d. Determine the estimated units of sales of the overall company product, M, necessary to reach the Break-Even Point for the current year.

Formula	Numbers

e. Based on the Break-Even Sales (units) in part (d), determine the sales of both laptops and tablets for the current year.