Darby Company, operating at full capacity, sold 116,100 units at a price of $123 per unit during the current year. Its income statement for the current year is as follows: Sales Cost of goods sold Gross profit Expenses: Selling expenses $3,526,000 Administrative expenses $3,526,000 Total expenses Income from operations $14,280,300 $7,052,000 $7,228,300 $7,052,000 $176,300 The division of costs between fixed and variable is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% 50% Administrative expenses 50% Management is considering a plant expansion program that will permit an increase of $1,230,000 in yearly sales. The expansion will increase fixed costs by $123,000, but will not affect the relationship between sales and variable costs. Compute the break-even sales (units) for the current year.

Darby Company, operating at full capacity, sold 116,100 units at a price of $123 per unit during the current year. Its income statement for the current year is as follows: Sales Cost of goods sold Gross profit Expenses: Selling expenses $3,526,000 Administrative expenses $3,526,000 Total expenses Income from operations $14,280,300 $7,052,000 $7,228,300 $7,052,000 $176,300 The division of costs between fixed and variable is as follows: Variable Fixed Cost of goods sold 70% 30% Selling expenses 75% 25% 50% Administrative expenses 50% Management is considering a plant expansion program that will permit an increase of $1,230,000 in yearly sales. The expansion will increase fixed costs by $123,000, but will not affect the relationship between sales and variable costs. Compute the break-even sales (units) for the current year.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...

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