For the coming year, Bernardino Company anticipates a unit selling price of $85, a unit variable cost of $15, and fixed costs of $420,000.

Instructions:

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

2. Compute the sales (units) required to realize operating income of $70,000. _______ units

3. Construct a cost-volume-profit graph on paper, assuming maximum sales of 10,000 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.

$1,000,000	ProfitLossBreak-even
$800,000	ProfitLossBreak-even
$600,000	ProfitLossBreak-even
$400,000	ProfitLossBreak-even
$200,000	ProfitLossBreak-even

4. Determine the probable operating income (loss) if sales total 8,000 units. If required, use the minus sign to indicate a loss.

$_____