Preparing Cost-Volume-Profit and Profit-Volume Graphs (LO3)

Domino's Pizza Assume a Domino’s Pizza shop has the following monthly revenue and cost functions:

DPZ eet Total revenues = $10.00X Total costs = $18,000 + $4.00X Required

a. Prepare a graph (similar to that in Exhibit 3.3) illustrating Domino’s cost-volume-profit relationships. The vertical axis should range from $0 to $72,000, in increments of $12,000. The horizontal axis should range from 0 units to 6,000 units, in increments of 2,000 units.

b. Prepare a graph (similar to that in Exhibit 3.4) illustrating Domino’s profit-volume relationships.
The horizontal axis should range from 0 units to 6,000 units, in increments of 2,000 units.

c. When is it most appropriate to use a profit-volume graph? (p. 79)