Construct a cost-volume-profit chart indicating the break-even sales for last year. Verify your answer, using the break-even equation.
Interchange Inc. had sales of $400,000, based on a unit selling price of $200. The variable cost per unit was $175, and fixed costs were $75,000. The maximum sales within Interchange Inc.’s relevant range are 2,750 units. Interchange Inc. is considering a proposal to spend an additional $32,750 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity.
- Construct a cost-volume-profit chart indicating the break-even sales for last year. Verify your answer, using the break-even equation.
- I need the chart graph
The cost-volume-profit analysis, sometimes referred to as the breakeven analysis, aims to identify the breakeven point for various sales volumes and cost structures. This information can be helpful for managers making immediate business choices. When performing a CVP analysis, a number of equations are utilized to represent pricing, cost, and other factors. These variables are then plotted out on an economic graph.
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