mple, the total cost The intercept of the able cost per unit, V. where the TR and TC ple). The Adventures sells 100 trips ll the graph). The slope of TR is the price per un Desert Adventures). The total cost (TC) line shows the total cost for each volume. For example, the to for a volume of 100 trips is $254,400 (= 1100 x $1,200] + $134,400). The intero total cost line is the fixed cost for the period, F, and the slope is the variable cost peri The break-even point is the volume at which TR = TC (that is, where the TR lines intersect). Volumes lower than breakeven result in an operating loss he TR TC. Self-Study Question The following information for Jennifer's Framing Supply is given for March Compute the following: a Monthly operating profit when sales total $360,000 (as here). b. Break-even number in units. Sales ............ Fixed manufacturing costs .......... Fixed marketing and administrative costs..... Total fixed costs. Total variable costs.......... Unit price Unit variable manufacturing cost..... Unit variable marketing cost................. $360,000 35,000 25,000 60,000 240,000 c. Number of units sold that would produce an operat- ing profit of $120,000. d. Sales dollars required to earn an operating profit of $20,000. e. Number of units sold in March. f Number of units sold that would produce an operat- ing profit of 20 percent of sales dollars. 90 The solution to this question is at the end of the chapter