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 83,700 units at a price of $48 per unit during the current year. Its income statement for the current year is as follows: Sales     $4,017,600 Cost of goods sold     1,984,000 Gross profit     $2,033,600 Expenses:       Selling expenses $992,000     Administrative expenses 992,000     Total expenses     1,984,000 Income from operations     $49,600 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 $336,000 in yearly sales. The expansion will increase fixed costs by $33,600, but will not affect the relationship between sales and variable costs. Required:  Determine (a) the unit variable cost and (b) the unit contribution marginfor the current year. Answers rounded to two decimal places. Unit variable cost $ Unit contribution margin $

FINANCIAL ACCOUNTING
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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 83,700 units at a price of $48 per unit during the current year. Its income statement for the current year is as follows:

Sales

 

 

$4,017,600

Cost of goods sold

 

 

1,984,000

Gross profit

 

 

$2,033,600

Expenses:

 

 

 

Selling expenses

$992,000

 

 

Administrative expenses

992,000

 

 

Total expenses

 

 

1,984,000

Income from operations

 

 

$49,600

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 $336,000 in yearly sales. The expansion will increase fixed costs by $33,600, but will not affect the relationship between sales and variable costs.

Required:

  1.  Determine (a) the unit variable cost and (b) the unit contribution marginfor the current year. Answers rounded to two decimal places.

Unit variable cost

$

Unit contribution margin

$

 

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