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 of $1,443,000 in yearly sales expansion will fixed by $192,400, but will not affect the ationship sales osts. Required: 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. units

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 of $1,443,000 in yearly sales expansion will fixed by $192,400, but will not affect the ationship sales osts. Required: 1. Determine the total variable costs and the total fixed costs for the current year. Total variable costs Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Unit variable cost Unit contribution margin 3. Compute the break-even sales (units) for the current year. units

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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