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 72,900 units at a price of $45 per unit during the current year. Its income statement for the current year is as follows:

Sales			$3,280,500
Cost of goods sold			1,620,000
Gross profit			$1,660,500
Expenses:
Selling expenses	$810,000
Administrative expenses	810,000
Total expenses			1,620,000
Income from operations			$40,500

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 $315,000 in yearly sales. The expansion will increase fixed costs by $31,500, but will not affect the relationship between sales and Costs that vary in total dollar amount as the level of activity changes.variable costs.

Required:

1. Determine the total variable costs and the Costs that tend to remain the same in amount, regardless of variations in the level of activity.total fixed costs for the current year. Enter the final answers rounded to the nearest dollar.

Total variable costs	$
Total fixed costs	$