A new product can be sold for $175 according to market research. The variable costs are $95 per unit, the fixed costs are $9600 per period, and the capacity is 520 units.

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 when the selling price is decreased by $5 and the fixed costs per period are increased to $10,875?

AppendixLO1