A firm manufactures a product which sells for $12 per unit. The variable costs consist of two parts: the variable manufacturing costs are $6 per unit and the variable selling costs are $1.50 per unit. The fixed costs are $2475 for the period. The capacity is 1500 units per period. a Draw a detailed break-even chart showing the fixed costs line, total costs line, total revenue line, break-even point, and profit and loss areas.

b. Determine the break-even volume and break even revenue, and compute the break-even as a percent of the capacity.

c. What is the new break-even point in units if the fixed costs are increased by $1095 in a period and the variable manufacturing costs per unit are decreased by 10%?

AppendixLO1