Determine the amount of sales

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Question 1: Determine 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 102,600 units at a price of $72 per unit during the current year. Its income statement for the current year is as follows:

Sales $7,387,200

Cost of goods sold 3,648,000

Gross profit $3,739,200

Expenses:

Selling expenses$1,824,000

Administrative expenses1,824,000

Total expenses 3,648,000

Income from operations $91,200

The division of costs between fixed and variable 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 that will permit an increase of $576,000 in yearly sales. The expansion will increase fixed costs by $57,600, but will not affect the relationship between sales and variable costs.

Reference no: EM132479099

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