ne the amount of sales (units) that would be necessary under Break-Even Sales Un

Question

ne the amount of sales (units) that would be necessary under Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 97,200 units at a price of $96 per unit during the current year. Its Income statement for the current year is as follows Sales $9,331,200 4,608,000 $4,723,200 Cost of goods sold Expenses: Selling expenses $2,304,000 Administrative expenses 2,304,000 Total expenses 4,608,000 $115,200 The division of costs between fixed and variable is as follows Variable . Fixed Cost of goods sold Selling expenses Administrative ? xpenses Management is considering a plant expansion program that will permit an increase of $768,000 in yearty sales. The expansion will increase fxed costs by $76,800, but will n affect the relationship between sales and variable costs. Required: 70% 75% 50% 30% 25% 50% 1. Determine the total variable costs and the total fixed costs for the current year. Enter the final answers rounded to the nearest dollar, Total variable costs Total fixed costs PreviousNext

Explanation / Answer

2)Unit variable cost =Variable cost /unit sold

            6105600 /97200

       = 62.81 per unit

contribution margin = price -variable cost

       = 96-62.81

      = 33.19

**price = 9331200/97200=96

3)BEP =Fixed cost /unit contribution

     =3110400 /33.19

   = 93715 units

4)new fixed cost : 76800+3110400=3187200

New BEP = 3187200 /33.19

               = 96029 Units

Variable Fixed cost cost of goods sold 3225600   [4608000*.70] 1382400 selling expense 1728000    [2304000*.75] 576000 administrative expense 1152000    [2304000*.50] 1152000 Total 6105600 3110400

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