Shout Company has one product: printing logos on sweatshirts for 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:

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 youranswer.

Transcribed Image Text:

Increase in Fixed Costs from Total Volume Range (production and sales Fixed Costs Previous Level Levl 40,000 80,000 100,000 0-10,000 Level225,001-40,000 evel 3 $40,000 20,000 10,001-25,000