Break-Even Sales and Cost-Volume-Profit Graph

Last year, Ridgecrest Inc. had sales of $4,596,200, based on a unit selling price of $490. The variable cost per unit was $270, and fixed costs were $1,474,000. The maximum sales within Ridgecrest Inc.'s relevant range are 16,000 units. Ridgecrest Inc. is considering a proposal to spend an additional $294,800 on billboard advertising during the current year in an attempt to increase sales and utilize unused capacity.

Instructions:

1. Construct a cost-volume-profit graph on your own paper and determine the break-even sales for last year.

Break-even point in dollars	$
Break-even point in units