darby company, operating at full capacity, sold 152,400 units at a price of $105 per...

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Accounting

Darby Company, operating at full capacity, sold 152,400 units at a price of $105 per unit during the current year. Its income statement is as follows: Sales $16,002,000 Cost of goods sold 5,670,000 Gross profit $10,332,000 Expenses: Selling expenses $2,835,000 Administrative expenses 1,715,000 Total expenses 4,550,000 Income from operations $5,782,000 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 60% 40% Selling expenses 50% 50% Administrative expenses 30% 70% Management is considering a plant expansion program for the following year that will permit an increase of $1,260,000 in yearly sales. The expansion will increase fixed costs by $168,000, but will

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