Breakeven sales under present and proposed conditions
Portmann Company, operating at full capacity, sold units at a price of $ per unit during the current year. Its income statement is as follows:
Line Item Description Amount Amount
Sales $
Cost of goods sold
Gross profit $
Expenses:
Selling expenses $
Administrative expenses
Total expenses
Operating income $
The division of costs between variable and fixed is as follows:
Line Item Description Variable Fixed
Cost of goods sold
Selling expenses
Administrative expenses
Management is considering a plant expansion program for the following year that will permit an increase of $ in yearly sales. The expansion will increase fixed costs by $ but will not affect the relationship between sales and variable costs.
