Let us consider the following example to illustrate the fundamentals of the CVP concept: Uncle Sam has been selling pies on the sidewalk of the Eastern Main Road for quite a number of years. He is a crowd favourite because of the good taste, consistent quality and variety. Everyday he would purchase freshly made pies from an out of town bakery for $2.00 each and sell them for $4.00 each. The pies are neatly packed in a small glass showcase built on a metal stand. He purchased this stand at a cost of $500.00. The labels on the showcase give the various fillings - fish, chicken, potato and cheese. He is usually sold out by 10:00am. The City Council has recently taken a decision to move all roadside vendors to a new facility built to accommodate these vendors on a busy corner on the Eastern Main Road. The new facilities are equipped with basic amenities and a small dining area. Each vendor would have to rent a booth from the City Council. In a quest to quell vendor's protests the City Council has agreed to two payment options. 1. A fixed weekly payment of $300.00 2. 10% of sales with no fixed weekly payment Confused by the issue, Uncle Sam contacted his niece Vana who has some accounting training to advise him on what he should do. Vana tells him not to worry and that she would use cost-volume-profit analysis to determine the best solution