Darby Company, operating at full capacity, sold 72,900 units at a price of $120 per unit during the current year.

Darby Company, operating at full capacity, sold 72,900 units at a price of $120 per unit during the current year. Its income statement for the current year is as follows:

Management is considering a plant expansion program that will permit an increase of $720,000 in yearly sales. The expansion will increase fixed costs by $72,000, but will not affect the relationship between sales and variable costs.

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