Break-Even Sales Under Present and Proposed Conditions Portmann Company, operating at full capacity, sold 1,000,000 unit

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Break-Even Sales Under Present and Proposed Conditions
Portmann Company, operating at full capacity, sold 1,000,000
units at a price of $188 per unit during the current year. Its
income statement is as follows:
The division of costs
between variable and fixed is as follows:
Management is considering a plant expansion program for the
following year that will permit an increase of $9,400,000 in yearly
sales. The expansion will increase fixed costs by $5,000,000 but
will not affect the relationship between sales and variable
costs.
1. Determine the maximum operating income
possible with the expanded plant.
2. If the proposal is accepted and sales
remain at the current level, what will the operating income or loss
be for the following year?