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

Exercise 16

Cost-volume-profit chart
For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of $125. The maximum sales within the relevant range are $2,500,000.
a. Construct a cost-volume-profit chart.
b. Estimate the break-even sales (dollars) by using the cost-volume-profit chart coming in part (a).
c. What is the main advantage of presenting the cost-volume-profit analysis in graphic form rather than equation form