CVP analysis with semifixed (step) costs. Haun Co. has one product: printing logos on sweatshirts for businesses. The sales price of $20 remains constant per unit regardless of v olume, 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 o perate at level I , l evel 2, or level 3? Support your answer.

Transcribed Image Text:

Level 1 Level 2 Level 3 Volume Range (production and sales) 0-10,000 10,001-25,000 25,001-40,000 Total Fixed Costs $ 50,000 80,000 100,000 Increase in Fixed Costs from Previous Level $30,000 20,000