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Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 135,300...

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Accounting

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Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 135,300 units at a price of $45 per unit during the current year. Its income statement is as follows Sales Cost of goods sold Gross profit Expenses $6,088,500 2,160,000 3,928,500 Selling expenses Administrative expenses $1,080,000 645,000 Total expenses 1,725,000 Income from operations $2,203,500 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold Selling expenses Administrative expenses 60% 50% 30% 40% 50% 70% Management is considering a plant expansion program for the following year that will permit an increase of $540,000 in yearly sales. The expansion will increase fixed costs by $72,000, but will not affect the relationship between sales and variable costs

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