Prepare a cost-volume-profit graph for the guitar shop. Label both axes in dollars with maximum values of $1.000,000. Draw a vertical line on the graph for the current ($800,000) sales level, and label total variable costs, total fixed costs, and total profits at $800,000 sales.

 

Fixed Variable Total Sales. ... $800,000 Costs Goods sold. $346,000 40,000 Labor. ... $180,000 10,000 9,000 48,000 10,000 Supplies 4,000 Utilities 5,000 Rent Advertising Miscellaneous. 10,000 5,000 Total costs.... $267,000 $400,000 (667,000) Net income. $133,000