Please answer in Excel

Problem 55A

Prepare cost-volume- profit chart; compute break-even sales and sales needed to achieve a specified level of income (L.O. 3, 4, 6)

See Right Company makes contact lenses. The company has a plant capacity of 200,000 units. Variable costs are $4,000,000 at 100% capacity. Fixed costs are $2,000,000 per year, but this is true only between 50,000 and 200,000 units.

Required

a. Prepare a cost-volume-profit chart for See Right Company assuming it sells its product for $40 each. Indicate on the chart the relevant range, break-even point, and the areas of net income and losses.

b. Compute the break-even point in units.

c. How many units would have to be sold to earn $200,000 per year?