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Profit-Volume Chart For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of
Profit-Volume Chart For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of $125. The maximum sales within the relevant range are $2,500,000 a. Determine the maximum possible operating loss. b. Compute the maximum possible operating profit C. Construct a profit volume chart on paper. Indicate whether each of the following levels of sales is in the operating profit area, operating loss area, or at the break-even point 4,500 units Operating loss area 8,000 units Operating loss area Break-even point 12,000 units 16,000 units 20,000 units Operating profit area Operating profit area d. Estimate the break-even sales (units) by using the profit volume chart constructed in part (c) 12,000 units
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