Exercise 3-2 Prepare a Cost-Volume-Profit (CVP) Graph [LO3-2]

Katara Enterprises distributes a single product whose selling price is $42 and whose variable expense is $30 per unit. The companys fixed expense is $30,000 per month.

Required:

1.

Prepare a cost-volume-profit graph for the company up to a sales level of 3,200 units. (Use the line tool to draw a single lines (Total Sales Revenue, Fixed Expense, Total Expense). This line should only contain the two endpoints. For your graph to grade correctly, you must enter the exact coordinates. To enter exact coordinates, double click on the point and enter the values of x and y. To remove a point from the graph, drag the point off an edge of the graph.)

2.	Calculate the companys break-even point in unit sales.