Break-Even Sales and Cost-Volume-Profit Chart

For the coming year, Cleves Company anticipates a unit selling price of $100, a unit variable cost of $50, and fixed costs of $305,000.

Required:

1. Compute the anticipated break-even sales (units). units

2. Compute the sales (units) required to realize a target profit of $130,000. units

3. Construct a cost-volume-profit chart, assuming maximum sales of 12,200 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even.

$850,000
$760,000
$610,000
$460,000
$370,000

4. Determine the probable income (loss) from operations if sales total 9,800 units. If required, use the minus sign to indicate a loss. $