Chapter 16, Problem 17E

Sara Pacheco is a sophomore in college and earns a little extra money by making beaded key ring accessories. She sells them on Saturday mornings at the local flea market. Sara charges $5 per unit and has unit variable costs (beads, wire rings, etc.) of $2. Her fixed costs consist of small pliers, a glue gun, etc., which cost her $90.

Required:

1. 1. Calculate Sara’s break-even units.
2. 2. Prepare a profit-volume graph for Sara.
3. 3. Prepare a cost-volume-profit graph for Sara.