# Question: Lotts Company produces and sells one product The selling price

Lotts Company produces and sells one product. The selling price is $10, and the unit variable cost is $6. Total fixed cost is $10,000.

Required:

1. Prepare a CVP graph with “Units Sold” as the horizontal axis and “$ Profit” as the vertical axis. Label the break-even point on the horizontal axis.

2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by $5,000, (b) Unit variable cost increases to $7, (c) Unit selling price increases to $12, and (d) Fixed cost increases by $5,000 and unit variable cost is $7.

Required:

1. Prepare a CVP graph with “Units Sold” as the horizontal axis and “$ Profit” as the vertical axis. Label the break-even point on the horizontal axis.

2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by $5,000, (b) Unit variable cost increases to $7, (c) Unit selling price increases to $12, and (d) Fixed cost increases by $5,000 and unit variable cost is $7.

## Answer to relevant Questions

Naismith Company produces a single product. The projected income statement for the coming year is as follows: Sales (53,000 units @ $36) ........ $1,908,000 Total variable cost ........... 1,030,320 Contribution margin ...Tensing Company’s projected profit for the coming year is as follows: Required: 1. Compute the break-even point in units. 2. How many units must be sold to earn a profit of $450,000? 3. Compute the contribution margin ...Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals $146,000. Each door handle sells for $12 and has variable cost of $9; each trim kit sells for ...The divisional manager has been gathering data so that he can choose between two different production processes. The first process would have a variable cost of $10 per case produced and total fixed cost of $100,000. The ...Explain the difference between the direct method and the sequential method.Post your question