Susannah Chardon is thinking about starting an upscale gift basket service. She would create gift baskets for corporate clients and then arrange for delivery. She is trying to decide if the gift basket service would be profitable. Unfortunately, Chardon€™s hard drive crashed before she finished her financial analysis. However, she did recover the following partial CVP chart:

Requirements
1. Label the axes, sales revenue line, total expense line, fixed expense line, operating income area, and operating loss area.
2. If Susannah sells 825 gift baskets in her first year, will the venture be profitable?
3. What are the break-even sales in baskets and dollars?

Transcribed Image Text:

70,000 60,000 50,000 40,000ト 30,000 0,000 10,000 0 200 400 600 801000 ,200 1,400