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The drucsion of caves between variatie and flaed is as follows! 1. Determine the total variable costs and the total fored costs for the cufrent veac. 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost $ Unit contribution margin 1 3. Compute the break-even sales (units) for the current year. units 4. Compute the break-even sales (units) under the proposed program for the following vear. units units 6. Determine the maximum inceme frem eperations posebie with the expanded plant. 1 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 vear? 1 8. Based on the data given, would you recommend accepting the proposal? a. In favor of the proposal because of the reduction in break-even point. b. In favor of the proposal because of the possibility of increasing income from operatiens. c. In fawor of the proposal because of the increase in break-even point. d. Reject the proposal because if future sales remain at the current level, the income from operations will increase. e. Reject the proposal because the sales necessary to maintain the current income from operations would be below the current vear sales. Choose the correct

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