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The division of costs between variable and fixed is as follows: Management is considering a plant expansion program for the following year that will permit

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The division of costs between variable and fixed is as follows: Management is considering a plant expansion program for the following year that will permit an increase of $13,020,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs. Required: 1. Determine the total varlable costs and the total fixed costs for the current year: Total variable costs The division of costs between variable and fined is as follows: costs by $5,000,000 but will not affect the relationship between sales and variable costs, Required: 1. Determine the total variable costs and the total foced costs for the currenc year. 2. Determine (a) the unit varibble cost and (b) the unit contribution margin for the current year. 3. Compute the break-cven sales (units) for the current year. units. 4. Compute the break-even sales (units) under the proposed program for the following year, units 4. Compute the break-even sales (units) under the proposed program for the following vear. units 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $61,400,000 of operating income that was earned in the current year. 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? \$ 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. b. In favor of the proposal because of the possiblity of increasing income from operationts. c. In favor of the proposal because of the increase in break-even point. d. Reject the proposal because if future sales remain at the current level, the income from operations will increase

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