Break-Even Sales and Cost-Volume-Profit ChartFor the coming year, Cleves Company anticipates a unit selling price of $98, a unit variable cost of $49, and fixed costs of $588,000.Required:1. Compute the anticipated break-even sales (units).units2. Compute the sales (units) required to realize a target profit of $259,700.units3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 24,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, aloss, or break-even.$1,646,400$1,470,000$1,176,000$882,000$705,6004. Determine the probable operating income (loss) if sales total 19,200 units. If required, use the minus sign to indicate a loss.

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Business

Accounting

Break-Even Sales and Cost-Volume- Cor noin

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Break-Even Sales and Cost-Volume-Profit Chart
For the coming year, Cleves Company anticipates a unit selling price of $98, a unit variable cost of $49, and fixed costs of $588,000.
Required:
1. Compute the anticipated break-even sales (units).
units
2. Compute the sales (units) required to realize a target profit of $259,700.
units
3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 24,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a
loss, or break-even.
$1,646,400
$1,470,000
$1,176,000
$882,000
$705,600
4. Determine the probable operating income (loss) if sales total 19,200 units. If required, use the minus sign to indicate a loss.

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