M$16-14.$ Preparing Cost$-$Volume$-$Profit and Profit$-$Volume Graphs

Assume a Connie's Pizza shop has the following monthly revenue and cost functions:

Total revenues $=$$$20\mathrm{.}00x$

Total costs $=$$$35,000+$$$6\mathrm{.}00x$

Required

a$.$ Prepare a graph $($similar to that in Exhibit $16\mathrm{.}3)$ illustrating Connie's cost$-$volume$-$profit relation$-$

ships. The vertical axis should range from $$0$ to $$120,000,$ in increments of $$20,000.$ The horizontal

axis should range from $0$ units to $6,000$ units, in increments of $2,000$ units.

b$.$ Prepare a graph $($similar to that in Exhibit $16\mathrm{.}4)$ illustrating Connie's profit$-$volume relationships.

The horizontal axis should range from $0$ units to $6,000$ units, in increments of $2,000$ units.

c$.$ When is it most appropriate to use a profit$-$volume graph?