ortmann 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:

Sales $188,000,000
Cost of goods sold (100,000,000)
Gross profit $88,000,000
Expenses:
Selling expenses $16,000,000
Administrative expenses 12,000,000
Total expenses (28,000,000)
Operating income $60,000,000
The division of costs between variable and fixed 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 for the following year that will permit an increase of $11,280,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs.

Determine the total variable costs and the total fixed costs for the current year.

Variable cost of goods sold is 70% of total cost of goods sold. While variable selling expenses is 75% of total selling expenses and variable administrative expenses is 50% of total administrative expenses.

Similarly, fixed cost of goods sold is 70% of total cost of goods sold. While fixed selling expenses is 75% of total selling expenses and fixed administrative expenses is 50% of total administrative expenses.

Total variable cost

[tex]= 100,000,000\ \times\ 70 \%\ +\ 16,000,000\ \times\ 75 \%\ +\ 12,000,000\ \times\ 50 \%[/tex]

= 70,000,000 + 12,000,000 + 6,000,000

=$88,000,000

Total fixed cost

[tex]= 100,000,000\ \times\ 30 \%\ +\ 16,000,000\ \times\ 25 \% + 12,000,000\ \times\ 50 \%[/tex]

= 30,000,000 + 4,000,000 + 6,000,000

=$40,000,000