SOLUTION
1. Total variable costs = Cost of goods sold + Selling expenses + Administrative expenses
= (70% * $5,040,000) + (75% * $2,520,000) * (50% * $2,520,000)
= $3,528,000 + $1,890,000 + $1,260,000
= $6,678,000
Total fixed costs = Cost of goods sold + Selling expenses + Administrative expenses
= (30% * $5,040,000) + (25% * $2,520,000) * (50% * $2,520,000)
= $1,512,000 + $630,000 + $1,260,000
= $3,402,000
2. Unit Variable Cost = Total Variable Costs / Total units sold
= $6,678,000 / 75,600 units
= $88.33
Unit Contribution margin = Sale Price per unit - Unit Variable cost
= $135.00 - $88.33
= $46.67
3. Break-even Sales Units = Total Fixed Costs / Unit Contribution margin
= $3,402,000 / 46.67
= 72,895 units
4. Break-even sales = Increased Fixed Cost / Unit Contribution margin
= $81,000 / 46.67
= 1,736 units
* As per HOMEWORKLIB RULES, i have answered first 4 sub parts.
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