Problem Set: Module 4 Management is considering a plant exp@ $11,220,000 in yearly sales. The expan relationship between sales and variable costs. hat will permit an increase of J,000 but will not affect the Required: i. Determine the total variable costs and the total fixed costs for the current year. Total*variable costs $ 87,000,000} 39,200,000 | 2. Determine (a) the unit variable cost and Unit variable cost $| 0.4652 x Unit contribution margin $ 0.5348] xX 3. Compute the break-even sales (units) for the current year. ) 73,319,455 | X units Total fixed costs $ (b) the unit contribution margin for the current year. 4. Compute the break-even sales (units) under the Proposed program for the following year. 81,742,378 | X units De Determine the amount of sales (units) that would be necessary under the proposed program to realize the $60,800,000 of operating income that was earned in the current year. 195,414,988 | X units 6. Determine the maximum operating income possible with the expanded plant. $ 870,000,000 | X 7. If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the following year? 0.46524| X Income y 8. Based on the data given, would you recommend accepting the proposal? 1. In favor of the proposal because of the reduction in break-even point. , In favor of the proposal because of the possibility of increasing income from operations. . In favor of the proposal because of the increase in break-even point. ' Reject the proposal because if future sales remain at the current level, the income from operations w crease. | intai i would be Reject the proposal because the sales necessary to maintain the current income from operations low the current year sales