Clone Computers assembles and packages personal computer systems from brand-name components. Its Home Office PC System is assembled from components costing $1400 per system and sells for $2000. Labour costs for assembly are $100 per system. This product line’s share of overhead costs is $10,000 per month.
a. How many Home Office Systems must be sold each month to break even on this product line?
b. What will be the profit or loss for a month in which 15 Home Office Systems are sold?
Use the graphical approach to CVP analysis to solve the problem.