How to prepare CVP graph.

Shirts Unlimited operates a chain of shirt stores that carry many styles of shirts that are all sold at the same price. To encourage sales personnel to be aggressive in their sales efforts, the company pays a substantial sales commission on each shirt sold. Sales personnel also receive a small basic salary.

The following table contains cost and revenue data for Store 36. These data are typical of the company's many outlets:

selling price per shirt	$40
Variable expense per shirt:
Invoice cost	$18
Sales commission	7
Total variable expense per shirt	$25
Fixed expenses per year:
Rent	$80,000
Advertising	150,000
Salaries	70,000
Total fixed expense per year	$300,000

Question

1. Calculate the annual break-even point in dollar sales and in unit sales for Store 36

2. Prepare a CVP graph showing cost and revenue data for Store 36 from zero shirts up to 30,000 shirts sold each year. Clearly indicate the break-even point on the graph. [the graph should show fix expense, total sales, total expense, break even point.]

Cost-volume-profit graph ed Expe 13001 1200 1100 1000 900 800 700 600 500 400 300 otal Sale al Exper k Even 200- 100 10000 20000 30000 Number of Shirts