The market research for the production and sale of a new dress indicates that it can be sold for $175 per dress. The variable costs are $85 per dress and the fixed costs are $7200 per period. The production capacity is 300 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 production capacity.

AppendixLO1