The market research for the production and sale of a new pair of boots indicates that it can be sold for $185 per pair. The variable costs are $95 per pair and the fixed costs are $8100 per period. The production capacity is 180 pairs 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 production capacity.

AppendixLO1