【正文】 xpenses 500,000Ine from operations$ 652,500The division of costs between fixed and variable is as follows:FixedVariableCost of sales 60%40%Selling expenses 50%50%Administrative expenses 55%45%Management is considering a plant expansion program that will permit an increase of $900,000 in yearly sales. The expansion will increase fixed costs by $242,500, but will not affect the relationship between sales and variable costs.Instructions1. Determine for 2010 the total fixed costs and the total variable costs.2. Determine for 2010 (a) the unit variable cost and (b) the unit contribution margin.3. Compute the breakeven sales (units) for 2010.4. Compute the breakeven sales (units) under the proposed program.5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $652,500 of ine from operations that was earned in 2010.6. Determine the maximum ine from operations possible with the expanded plant.7. If the proposal is accepted and sales remain at the 2010 level, what will the ine or loss from operations be for 2011?8. Based on the data given, would you remend accepting the proposal? Explain.Chapter 22 BudgetingTerminology: budgetsresponsibility centerbudgetary slackgoal conflictcontinuous budgetingzerobased budgetingstatic budgetflexible budgetmaster budgetine statement budgetssales budgetproduction budgetdirect materials purchases budgetdirect labor cost budgetfactory overhead cost budgetcost of goods sold budgetselling and administrative expenses budgetbudgeted ine statementbalance sheet budgetscash budgetcapital expenditures budgetbudget balance sheetoperating activitiesfinancing activitiesinvesting activitiesMajor Contents:1. Nature and Objectives of BudgetingObjectives of BudgetingHuman Behavior and Budgeting ※2. Budgeting SystemsStatic BudgetFlexible BudgetComputerized Budgeting Systems ※3. Master Budget4. Ine Statement BudgetsSales BudgetProduction BudgetDirect Materials Purchases BudgetDirect Labor Cost BudgetFactory Overhead Cost BudgetCost of Goods Sold BudgetSelling and Administrative Expenses BudgetBudgeted Ine Statements5. Balance Sheet BudgetsCash BudgetCapital Expenditures BudgetBudgeted Balance SheetQuestions: (on page 125—126)Eye openers:1,3,5,6,8,11,12,14.School assignments: (Preparing an operating budget)Randy’s Kayaks, Inc., manufactures and sells one person fiberglass kayaks. Randy’s balance sheet for the year ended December 31,2011,was as follows：RANDY’S KAYAKS, INC.Balance SheetDecember 31,2011AssetsLiabilities Current assetsCurrent liabilities Cash $52,000 Accounts payable$131,000 Accounts receivable1,200,000Ine taxes payable45,000 Inventories:Total current liabilities176,000 Raw materials$120,000Longterm liabilities Finished goods287,500407,500 Notes payable70,000 Total current assets1,659,500 Total liabilities246,000Stockholders’ EquityPlant Assets, net of accumulated depreciation2,250,000 Common stock1,600,000 Retained earnings2,063,500 Total equity3,663,500Total assets$3,909,500Total liabilities and stockholders’ equity$3,909,500The following additional data about Randy’s sales, production costs, and other expenses follow:Randy’s Kayaks, Inc., additional data:Time period for which to budgetCash collections:(all sales are on account) Collected in the quarter of sale40% Collected in the quarter after sale60% Bad debt percentage1%Cash disbursements: Paid in quarter of purchase70% Paid in quarter after purchase30%Ending raw materials inventory40% of next quarter’s salesEnding finished goods inventory10% of next quarter’s salesBeginning raw materials inventory,12/31/201140,000 poundsBeginning finished goods inventory,12/31/20111,000 kayaksBudgeted sales, 1st quarter, 201210,000 kayaksBudgeted sales, 2nd quarter, 201215,000 kayaksBudgeted sales, 3rdquarter, 201216,000 kayaksBudgeted sales, 4th quarter, 201214,000 kayaksBudgeted sales, 1st quarter, 201310,000 kayaksEquipment purchases, 1st quarter, 2012$30,000 purchased 1/1/2012Equipment purchases, 2nd quarter, 2012$0Equipment purchases, 3rd quarter, 2012$0Equipment purchases, 4th quarter, 2012$150,000 purchased 12/30/2012Quarterly dividends declared and paid each quarter in 2012$4,000Expected sales price per u