Break$-$even sales and cost$-$volume$-$profit chart

Last year, Hever Inc. had sales of $500000$ based on a unit selling price of $$250.$The variable cost per unit was $$175,$ and fixed cost were $$75000.$ The maximum sales within Hever Inc.$\text{'}$s relevant range are $2500$ units. Hever Inc., is considering a proposal to spend an additional $33750$ on billboard advertising during the current year in an attempt to increase sells and utilize unused capacity.

Required:

Construct a cost$-$volume$-$profit chart on your own paper, indicating the break$-$even sales for last year.

Break$-$even sales $($dollars$)$

Break$-$even sales $($units$)$

Using the cost volume profit chart prepare in part one determine

Operating income for last year and the

Maximum operating income that could have been realized during the year.

Operating income

Maximum operating income

Construct a cost volume profit chart indicating the break wven sales for the current year,assuming that a noncancellable contract is signed for the additional billboard advertizing. No changes are expected in the unit selling prize or other costs.

Dolars

Units

Using the cost volume profit chart prepared in part $3$ determine the operating income if sales total $2000$ units and the maximum operating income that could be realized during the year.

Operating income at $2,000$ units

Maximum operating income $\_.$