Question

I ONLY NEED THE ANSWER TO QUESTION 7, THANK YOU

Determine the amount of sales (units) that would be necessary under

Break-Even Sales Under Present and Proposed Conditions

Darby Company, operating at full capacity, sold 89,100 units at a price of $105 per unit during the current year. Its income statement for the current year is as follows:

Sales			$9,355,500
Cost of goods sold			4,620,000
Gross profit			$4,735,500
Expenses:
Selling expenses	$2,310,000
Administrative expenses	2,310,000
Total expenses			4,620,000
Income from operations			$115,500

The division of costs between fixed and variable is as follows:

	Variable		Fixed
Cost of goods sold	70%		30%
Selling expenses	75%		25%
Administrative expenses	50%		50%

Management is considering a plant expansion program that will permit an increase of $735,000 in yearly sales. The expansion will increase fixed costs by $73,500, but will not affect the relationship between sales and variable costs.

Required:

1. Determine the total variable costs and the total fixed costs for the current year. Enter the final answers rounded to the nearest dollar.

Total variable costs	$ 6,121,500
Total fixed costs	$ 3,118,500

2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Enter the final answers rounded to two decimal places.

Unit variable cost	$ 68.7
Unit contribution margin	$ 36.3

3. Compute the break-even sales (units) for the current year. Enter the final answers rounded to the nearest whole number.
85,909 units

4. Compute the break-even sales (units) under the proposed program for the following year. Enter the final answers rounded to the nearest whole number.
87,934 units

5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $115,500 of income from operations that was earned in the current year. Enter the final answers rounded to the nearest whole number.
91,116 units

6. Determine the maximum income from operations possible with the expanded plant. Enter the final answer rounded to the nearest dollar.
$ 296430

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 year? Enter the final answer rounded to the nearest dollar.

Answer 1

ANSWER FOR THE 7TH QUESTION: IS $42.330 or $42,000 IF Variable cost per unit is round-off that is considered as $68.7. answer is$42,330    But if Variable cost not round-off to two dismal points than the variable cost per unit is $68.7037037 than Operating income under the same sales units id $42,000. You may take $42330 or $42000 ap per your requirements.