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Break-Even Sales Under Present and Proposed Conditions Sales Cost of goods sold Gross profit...

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Accounting

Break-Even Sales Under Present and Proposed Conditions
Sales
Cost of goods sold
Gross profit
Expenses:
Selling expenses $14,000,000
Administrative expenses 11,000,000
Total expenses
Operating income
$186,000,000
(100,000,000)$86,000,000
The division of costs between variable and fixed is as follows:
by $4,000,000 but will not affect the relationship between sales and variable costs.
eook
The division of costs between variable and fixed is as follows:
Determine the total variable costs and the total fixed costs for the current year.
Total variable costs
Total fixed costs
Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.
Unit variable cost
$
Unit contribution margin
5
Compute the break-even sales (units) for the current year.
units
Compute the break-even sales (units) under the proposed program for the following year:
x units
year.
x units
Determine the maximum operating income possible with the expanded plant.
$,x
If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the following year?
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