M M G A a Ce Ch. 20 Assignment allook Break-even sales under present and proposed conditions Show Me How P Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $187 per unit during the current year. Its income statement is as follows: Sales Cest of goods sold Gross profit $187,000,000 (102,000,000) $85,000,000 Expenses Selling expenses $15,000,000 Administrative expenses 8,700,000 Total expenses (23,700,000) 161,300,000 Operating Income The division of costs between variabin and fixes is as follows Cost of goods seld Selling expenses Variable Fixed 70% 30% 75% 50% 25% 50% Administrative expenses Management considering a plant expansion program for the following year that win pemt an increase of $11.220.000 is yearly sales. The pens will increase and its by 14.300.00 riationship between sales and variable cost Required: 1. Determine the total variable costs and the total Exed costs for the current year Tal variatie custs Toral fixed costs s 2. Determine (a) the unit variable cast and th) the unit contribution margin for the ent Unit variable cost S unit contribution margin s Check My Work Assignment Score 38% Email tructor Save and t Phous 0 G c C 3 Ch. 20 Assignment Unit contribution margin s eBlock 3. Compute the break-even sales (units) for the current year units Show Ne How 4. Compute the break-even sales (units) under the proposed program for the flowing year units 5. Determine the amount of sales (unit) that would be necessary under the proposed program to realize the $61,200,000 of operating incame t 6. Determine the maximum operating income possible with the expanded plent 7. If the proposals accepted and sales remain at the surrent level, what will the operating income or its be for the folowing year? Income 8. Based on the data giver, would you recommend accepting the proposal a. In favor of the proposal because of the reduction in break even point b. In favor of the proposal because of the possity of increasing came from operations In favor of the proposel because of the increase in break-event d. Reject the pesposal because if future sales remain at the current levet, the none fun operations will inca Reject the proposal because the sales necessary to maintain the current income tam cperations would be below the current year as Choose the correct answe Mutiply the percentages for fixed and variable costs by each cest 2. Divide the total variatie costs by number of uns Check My Work Assignment Boon 51.44% Previous Weit