Break-Even Point—Graphic Analysis Using the graph below, answer the following questions:

1. Copy the graph and identify (label) fixed costs, variable costs, total revenues, the total cost line, and the break-even point.
2. Determine the break-even point in both sales dollars and volume.
3. Suppose that as a manager you forecast sales volume at 7,000 units. At this level of sales, what would be your total fixed costs, approximate variable costs, and profit (or loss)?
4. At a sales volume of 3,000 units, what would be the level of fixed costs, variable costs, and approximate profit (or loss)?

Transcribed Image Text:

Cost (in thousands) $50 45 40 35 30 25 20 15 10 5 0 1 2 3 4 5 6 7 8 9 Volume (in thousands of units) 10 10 11