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Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 500,000...

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Accounting

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Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 500,000 units at a price of 94 per unit during the current year. Its Income statement is as follows: Sales Cost of goods sold Gross profit Expenses: $47,000,000 25,000,000 $22,000,000 Selling expenses Administrative expenses 3,000,000 $4,000,000 Total expenses 7,000,000 Income from operations $15,000,000 The division of costs between variable and fixed is as follows: Variable 70% 75% 5096 Fixed 30% 25% 5096 Cost of goods sold Selling expenses Administrative expenses Management is considering a plant expansion program for the following year that wll permit an increase of $3,760,000 in yearly sales. The expansion will Increase fixed costs by $1,800,000 but will not affect the relationship between sales and variable costs. Required: 1. Detemine the total variable costs and the total fixed costs for the current year Total variable costs

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