Answered: For the coming year, Cabinet Inc.…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.16E

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Profit-Volume Graph

For the coming year, Cabinet Inc. anticipates fixed costs of $63,450, a unit variable cost of $90, and a unit selling price of $105. The maximum sales within the relevant range are $710,640.

a. Determine the maximum possible operating loss.
$fill in the blank 1

b. Compute the maximum possible operating profit.
$fill in the blank 2

c. Construct a profit-volume graph on paper. Indicate whether each of the following levels of sales is in the operating profit area, operating loss area, or at the break-even point.

1,000 units
2,000 units
3,000 units
4,000 units
5,000 units

d. What is the break-even points in units.
fill in the blank 8 units

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