1. Karlik Enterprises distributes a single product whose selling price is $24 per unit and whose variable expense is $18 per unit. The companys monthly fixed expense is $24,000.

Exercise 5-2 (Static) Part 1

Required:

Prepare a cost-volume-profit graph for the company up to a sales volume of 8,000 units.

2. Jaffre Enterprises distributes a single product whose selling price is $16 per unit and whose variable expense is $11 per unit. The companys fixed expense is $16,000 per month.

Required:

Prepare a profit graph for the company up to a sales volume of 4,000 units.

3. Jaffre Enterprises distributes a single product whose selling price is $16 per unit and whose variable expense is $11 per unit. The companys fixed expense is $16,000 per month.

Calculate the companys break-even point in unit sales.

CVP Graph Total Sales Revenue $200.000 Fixed Expense $150,000 Total Expense Dollars $100.000 $50.000 0 2000 4000 6000 8000 Volume in Units Profit Graph Profit $5,000 Break Even Point $0 $-5,000 Profit $-10,000 $-15,000 $-20,000 0 500 1000 1500 2000 2500 3000 3500 4000 Sales Volume in Units