Break-Even Sales and Cost-Volume-Profit Chart Last year, Hever Inc. had sales of $552,000, based on a unit selling price of $230. The variable cost per unit was $184, and fixed costs were $55,200. The maximum sales within Hever Inc.'s relevant range are 3,100 units. Hever inc. is considering a proposal to spend an additional $20,700 on bulboard advertising during the current year in an attempt to increase sales and utalize unused capacity, Required: 1. Construct a cost-volume-profit chart on your own paper, indicating the break-even sales for last year. In your computations, do not round the contribution margin percentage. Break-even sales (doliars) Break-even sales (units) 2. Using the cost-volume-profit chart prepared in part (1), determine (a) the income from operations for last year and (b) the maximum income from operations that could have been realzed during the year. In your computations, do not round the contribution margin percentage. 3. Construct a cost-volume-profit chart (on your own paper) indicating the break-even sales for the current year, assuming that a noncancellable contract is signed for the additional billboard advertising. No changes are expected in the unit selling price or other costs, In your computations, do not round the contribution margin percentage. Doliars Units 4. Using the cost-volume-profit chart prepared in part (3), determine (a) the income from operations if sales total 2,400 units and (b) the maximum income fram oneratinns that inilit he realiped disine the vext. Th vour enmoutations, do not round the contribution maroin narrentane. 1. Construct a cost-volume-profit chart on your own paper, indicating the break-even sales for last year. In your computations, do not round the contribution margin percentage. Break-even sales (dollars) Break-even sales (units) 2. Using the cost-volume-profit chart prepared in part (1), determine (a) the income from operations for last year and (b) the maximum income from operations that could have been realized during the year. In your computations, do not round the contribution margin percentage. 3. Construct a cost-volume-profit chart (on your own paper) indicating the break-even sales for the current year, assuming that a noncancellabie contract is signed for the additional biliboard advertising. No changes are expected in the unit selling price of other costs. In your computations, do not round the contribution margin percentage. Dollars Units 4. Using the cost-volume-prolit chart prepared in part (3), determine (a) the incomo from operations if sales total 2,400 units and (b) the maximum inceme from operations that could be realzed during the year, In your computations, do not round the contribution margin percentage. Income from operations at units Maximum income from operations
