Question

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 93,150 units at a price of $114 per unit during the current year. Its income statement for the current year is as follows:

Sales			$10,619,100
Cost of goods sold			5,244,000
Gross profit			$5,375,100
Expenses:
Selling expenses	$2,622,000
Administrative expenses	2,622,000
Total expenses			5,244,000
Income from operations			$131,100

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 $798,000 in yearly sales. The expansion will increase fixed costs by $79,800, 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	$6948300
Total fixed costs	$3539700

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	$74.59
Unit contribution margin	$39.41

3. Compute the break-even sales (units) for the current year. Enter the final answers rounded to the nearest whole number.
89817units

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.
91842 units

5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $131,100 of income from operations that was earned in the current year. Enter the final answers rounded to the nearest whole number.
units

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

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.
$ Income

I managed to figure out the first four but got stuck on number five, please help!

Answer 1