Break-Even Sales Under Present and Proposed Conditions PortmannCompany, operating at full capacity, sold 1,000,000 units at aprice of $190 per unit during the current year. Its incomestatement is as follows: Sales $190,000,000 Cost of goods sold(101,000,000) Gross profit $89,000,000 Expenses: Selling expenses$14,000,000 Administrative expenses 17,600,000 Total expenses(31,600,000) Operating income $57,400,000 The division of costsbetween variable and fixed is as follows: Variable Fixed Cost ofgoods sold 70% 30% Selling expenses 75% 25% Administrative expenses50% 50% Management is considering a plant expansion program for thefollowing year that will permit an increase of $9,500,000 in yearlysales. The expansion will increase fixed costs by $5,000,000 butwill not affect the relationship between sales and variable costs.Required:

1. Determine the total variable costs and the total fixed costsfor the current year. Total variable costs $ Total fixed costs$

2. Determine (a) the unit variable cost and (b) the unitcontribution margin for the current year. Unit variable cost $ Unitcontribution margin $ ?

3. Compute the break-even sales (units) for the current year.units ?

4. Compute the break-even sales (units) under the proposedprogram for the following year. units ?

5. Determine the amount of sales (units) that would be necessaryunder the proposed program to realize the $57,400,000 of operatingincome that was earned in the current year. units ?

6. Determine the maximum operating income possible with theexpanded plant. $ ?

7. If the proposal is accepted and sales remain at the currentlevel, what will the operating income or loss be for the followingyear? $ ?