The fields in yellow require an answer. Thank you. ## Break-even Sales under Present and Proposed Conditions**Objective:** To determine the break-even sales units under current and proposed conditions for Portman Company and Bee Gee Company.### Portman Company Analysis#### Current Year Financials- **Sales:** $188,000,000 (1,000,000 units at $188 per unit)- **Cost of Goods Sold (COGS):** $70,000,000- **Gross Profit:** $118,000,000- **Operating Expenses:** - Selling: $16,000,000 - Administrative: $12,000,000 - Total Operating Expenses: $28,000,000- **Operating Income:** $90,000,000 The division of costs between variable and fixed for the current year is as follows:- **COGS:** 70% Variable, 30% Fixed- **Selling Expenses:** 75% Variable, 25% Fixed- **Administrative Expenses:** 50% Variable, 50% Fixed#### Proposed ExpansionFor the following year, the proposed expansion plans are:- **Increase in Yearly Sales:** $11,280,000- **Increase in Fixed Costs:** $5,000,000- **No Change in Variable Costs Proportion to Sales**### Instructions and Calculations1. **Determine the Total Variable and Fixed Costs for the Current Year.**2. **Calculate the Unit Variable Cost and Unit Contribution Margin for the Current Year.**3. **Compute the Break-even Sales Units.**4. **Evaluate the Break-even Sales Units under the Proposed Program.**5. **Assess the Units Needed to Achieve $60,000,000 Operating Income under the Proposed Program.**6. **Determine the Maximum Operating Income with the Expanded Plant.**7. **Determine Operating Income if Sales Remain at Current Level Post-Expansion.**8. **Provide a Recommendation on Accepting the Proposal.**### Bee Gee Company Analysis#### Income Statement Overview (For Year Ending December 31, 2021)- **Sales:** $199,280,000- **Cost of Goods Sold:** $70,000,000- **Gross Profit:** $129,280,000- **Operating Expenses:** - Selling: $12,000,000 - Administrative: $6,000,000 - Total Operating Expenses: $18,

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Obj. 2.3 PR 6-2A Break-even sales under present and proposed conditions Portmann Company, operating at full capacity, sold 1.000.000 units at a price of $188 per unit during the current year. Its income statement is as follows: Sales.... Cost of goods sold $ 188,000,000 (100,000,000) $ 88,000,000 Gross profit.. Expenses: Selling expenses.. $16,000,000 Administrative expenses... 12,000,000 Total expenses (28,000,000) $ 60,000,000 Operating income.. The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30%

Obj. 2.3 PR 6-2A Break-even sales under present and proposed conditions Portmann Company, operating at full capacity, sold 1.000.000 units at a price of $188 per unit during the current year. Its income statement is as follows: Sales.... Cost of goods sold $ 188,000,000 (100,000,000) $ 88,000,000 Gross profit.. Expenses: Selling expenses.. $16,000,000 Administrative expenses... 12,000,000 Total expenses (28,000,000) $ 60,000,000 Operating income.. The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 70% 30%

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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