Break-Even Sales Under Present and Proposed Conditions Darby Company, operating at full capacity, sold 500,000 units at a price of $94 per unit during the current year. Its income statement is as follows: Sales     $47,000,000 Cost of goods sold     25,000,000 Gross profit     $22,000,000 Expenses:       Selling expenses $4,000,000     Administrative expenses 3,000,000     Total expenses     7,000,000 Income from operations     $15,000,000 The division of costs between variable and fixed is as follows:   Variable Fixed Cost of goods sold 70%   30%   Selling expenses 75%   25%   Administrative expenses 50%   50%   Management is considering a plant expansion program for the following year that will permit an increase of $3,760,000 in yearly sales. The expansion will increase fixed costs by $1,800,000 but will not affect the relationship between sales and variable costs. 4.  Compute the break-even sales (units) under the proposed program for the following year. units 5.  Determine the amount of sales (units) that would be necessary under the proposed program to realize the $15,000,000 of income from operations that was earned in the current year. units 6.  Determine the maximum income from operations possible with the expanded plant. $ 7.  If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year? $ Income

Break-Even Sales Under Present and Proposed Conditions

Darby Company, operating at full capacity, sold 500,000 units at a price of $94 per unit during the current year. Its income statement is as follows:

Sales     $47,000,000
Cost of goods sold     25,000,000
Gross profit     $22,000,000
Expenses:      
Selling expenses $4,000,000    
Administrative expenses 3,000,000    
Total expenses     7,000,000
Income from operations     $15,000,000

The division of costs between variable and fixed is as follows:

  Variable Fixed
Cost of goods sold 70%   30%  
Selling expenses 75%   25%  
Administrative expenses 50%   50%  

Management is considering a plant expansion program for the following year that will permit an increase of $3,760,000 in yearly sales. The expansion will increase fixed costs by $1,800,000 but will not affect the relationship between sales and variable costs.

4.  Compute the break-even sales (units) under the proposed program for the following year.
units

5.  Determine the amount of sales (units) that would be necessary under the proposed program to realize the $15,000,000 of income from operations that was earned in the current year.
units

6.  Determine the maximum income from operations possible with the expanded plant.
$

7.  If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?
$ Income 

 

Tired of numerous paper assignments?
Rely on us and receive professional paper writing assistance!
Professional paper Writing Assistance

Who We Are

We are a professional website for customized writing. If you searched a question and stumbled into our website, you are in the right place to receive assistance with your coursework.

Do you handle any type of coursework?

Yes. We have displayed prior orders to demonstrate our experience. We can answer this question for you as we have previously. Please fill out our Order Form so that we may ensure its flawlessness. Correctly completing the order form will help our staff with reference, requirements, and future communication.

Is it hard to Place an Order?

  1. Click on the “Order Now” tab at the top menu or “GET A FREE QUOTE” icon at the bottom and a new page will appear with an order form to be filled
  2. Fill in the initial requirements in the small order form located on the home page and press “continue” button to proceed to the main order form or press “order” button in the header menu. Starting from there let our system intuitively guide you through all steps of ordering process. Submit detailed paper instructions, upload necessary files if needed and provide your contact information – you are almost done!
  3. Proceed with the payment- click on “PROCEED TO CHECKOUT” at the bottom of the page. From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it. All your payments are processed securely through PayPal. This enables us to guarantee a 100% security of your funds and process payments swiftly.
  4. Delivery- Once finished, your final paper will be available for download through your personal dashboard. You will also receive an email notification with a copy of your paper attached to it.