3 Case Summary Orton Company distributes one product that sells for $11.50 per unit and incurs variable expenses of $8.25 per unit. Its monthly fixed expense is $80,000. The company currently pays its sales representatives a sales commission of $1.75 per unit sold; however, it is considering replacing these sales commissions with sales salaries of $70,000 per month. Orton would like your help in creating a cost-volume-profit (CVP) graph and a profit graph for both compensation scenarios up to a sales volume of 50,000 units. The wwww " m CVP Graph Commissions Required: (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 3a. The fact that the CVP graph's blue line is horizontal indicates which of the following statements is true? 7 The average fixed expense per unit increases as the sales volume increases from O units to 50,000 units. The total fixed expense decreases as the sales volume increases from O units to 50,000 units. 7 The total fixed expense increases as the sales volume increases from O units to 50,000 units. The total fixed expense does not change between a sales volume of 0 units and 50,000 units. 3b. The fact that the CVP graph's turquoise line intersects the Y-axis (the vertical axis) at $80,000 and then slants upward as the sales volume increases indicates which of the following statements is true? The total expense is a mixed cost that equals $8.25 when the sales volume is 1 unit. The total expense is purely a fixed expense that increases as the sales volume increases. The total expense is a mixed cost that includes a fixed component and a variable component. The total expense is purely a variable expense that increases as the sales volume increases. 3c. Which of the following statements is true with respect to the intersection of the red and blue lines? It represents the sales volume where the company's total sales equal its total fixed expense. It represents the sales volume where the company's total sales equal its total expense. It represents the company's break-even point, or that point where profits equal zero. It represents the sales volume where the company's total sales equal its total variable expense.