CVP Analysis with Step Costs

Essay

CVP analysis with step costs.Sparkle Company has one product: printing t-shirts with logos for various businesses.The sales price of $20 remains constant per unit regardless of volume,as does the variable cost of $12 per unit.The company is considering operating at one of the following three monthly levels of operations:

Required:
a.Calculate the break-even point(s)in units.
b.If the company can sell everything it makes,should it operate at level 1,level 2,or level 3? Support your answer.