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Kay graduated from MCC and decided to start her business selling Teenie - Tinee - Tots clothing. She intends to later create her own line

Kay graduated from MCC and decided to start her business selling Teenie-Tinee-Tots clothing. She intends to later create her own line to compete with the brand Osh-Kosh (Mi Gosh! meaning overpriced). However, her immediate concern is to stay in business for the very shortterm. She has rental expense of $2,000, insurance of $750, and salaries and wages of $1,750. The average selling price of her merchandise is $25, and variable costs will be about $10.
Consider that she wants to figure out her monthly budget and profitability, answer the following:
a. How many pieces must she sell to breakeven? Show computation.
(2 points)
b. What would be the dollar value of the number of pieces? Show computation.
(2 points)
c. Using the graph paper provided, draw the cost-volume-profit graph. Label each line. (6 points)
d. If she wants to make a target profit of $7,500, how many pieces must she sell? Show computation.
(2 points)
e. If Kay sells only 200 units, she would realize an operating loss. What would be the amount of her loss? Identify the relevant points on the graph and use a dotted line to identify the relationships.
(3 points)
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