Darby Company, operating at full capacity, sold 159,800 units at a price of $111 per unit during the current year. Its income statement is as follows: Sales $17,737,800 Cost of goods sold 6,290,000 Gross profit $11,447,800 Expenses: Selling expenses $3,145,000 Administrative expenses 1,887,000 Total expenses 5,032,000 Income from operations $6,415,800 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 60% 40% Selling expenses 50% 50% Administrative 30% 70% expenses Management is considering a plant expansion program for the following year that will permit an increase of $1,443,000 in yearly sales. The expansion will increase fixed costs by $192,400, but will not affect the relationship between sales and variable costs.

Darby Company, operating at full capacity, sold 159,800 units at a price of $111 per unit during the current year. Its income statement is as follows: Sales $17,737,800 Cost of goods sold 6,290,000 Gross profit $11,447,800 Expenses: Selling expenses $3,145,000 Administrative expenses 1,887,000 Total expenses 5,032,000 Income from operations $6,415,800 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 60% 40% Selling expenses 50% 50% Administrative 30% 70% expenses Management is considering a plant expansion program for the following year that will permit an increase of $1,443,000 in yearly sales. The expansion will increase fixed costs by $192,400, but will not affect the relationship between sales and variable costs.

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 2MC: The following information is available for Cooke Company for the current year: The gross margin is...

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please solve question 4 to question 7. thanks

Darby Company, operating at full capacity, sold 159,800 units at a price of $111 per unit during the current year. Its income statement is as follows:
Sales
$17,737,800
Cost of goods sold
6,290,000
Gross profit
$11,447,800
Expenses:
Selling expenses
$3,145,000
Administrative expenses
1,887,000
Total expenses
5,032,000
Income from operations
$6,415,800
The division of costs between variable and fixed is as follows:
Variable
Fixed
Cost of goods sold
60%
40%
Selling expenses
50%
50%
Administrative
30%
70%
expenses
Management is considering a plant expansion program for the following year that will permit an increase of $1,443,000 in yearly sales. The expansion will increase fixed costs by $192,400, but will not affect the relationship between sales and variable costs.

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