treal Ever Sales Under Present and Proposed Conditions Darty Company, operating at ful capety, sold 500,000 units at a price of 594 per un during the current year. It income statement is as follows 547,000,000 Cost of goods sold 25,000,000 Gross profit $22,000,000 Expenses Seling expenses $4,000,000 Administrative expense 3.000.000 Total expenses 7,000,000 Income from operation $15,000,000 The division of costs and is as follows: Variable Piwed Cost of goods sold 704 305 seling penses 75 25 Administrative 50% expenses Management is considering plant expansion program for the following year that will permit an increase of 62,700,000 nyel. The expansion will incremefoed costs by $1,800,000 tot will retur tre relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total fixed costs for the current year Total variable costs Total faced costs 2. Determine (a) the unit variable cost and (b) then contributie margin for the current year Required: 1. Determine the total variable costs and the total fed 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 year Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. urvis 4. Compute the break-even sales (units) under the proposed program for the following year. units 5. Determine the amount of sales (units) that would be necessary under the proposed program to rate the $15,000,000 of income from operations that was came in the current year units 6. Determine the maximum income from operations possible with the expended 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? 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. b. In favor of the proposal because of the possibility of increasing income from operations. c. In favor of the proposal because of the increase in break-even point, d. Reject the proposal because of future sales remain at the current level, the income from operations will increase e. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current year sales