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www. Darby Company, operating at full capacity, sold 172,900 units...

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Accounting

www. Darby Company, operating at full capacity, sold 172,900 units at a price of $75 per unit during the current year. Its income statement is as follows: Sales $12,967,500 Cost of goods sold 4,600,000 Gross profit $8,367,500 Expenses: Selling expenses $2,300,000 Administrative expenses 1,375,000 Total expenses 3,675,000 Income from operations $4,692,500 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 $1,200,000 in yearly sales. The expansion will increase fixed costs by $160,000, but will not affect the relationship between sales and variable costs. Required: 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs $ Total fixed T

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