BreakEven Sales Under Present and Proposed Conditions
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:
by $ but will not affect the relationship between sales and variable costs.
eook
The division of costs between variable and fixed is as follows:
Determine the total variable costs and the total fixed costs for the current year.
Total variable costs
Total fixed costs
Determine a the unit variable cost and b the unit contribution margin for the current year.
Unit variable cost
$
Unit contribution margin
Compute the breakeven sales units for the current year.
units
Compute the breakeven sales units under the proposed program for the following year:
units
year.
units
Determine the maximum operating income possible with the expanded plant.
$
If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the following year?
