Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 6

Break-even sales and cost-volume-profit chart
For the coming year, Culpeper Products Inc. anticipates a unit selling price of $150, a unit variable cost of $110, and fixed costs of $800,000.
Instructions
1. Compute the anticipated break-even sales (units).
2. Compute the sales (units) required to realize income from operations of $300,000.
3- Construct a cost-volume-profit chart, assuming maximum sales of 40,000 units within the relevant range.
4. Determine the probable income (loss) from operations if sales total 32,000 units.