A CVP graph such as the one shown below is a useful technique for showing relationships among an organization's costs, volume, and profits. Required: 1. Identify the numbered components in the CVP graph. 2. State the effect of each of the following actions on line 3, line 9, and the break-even point. a. The unit selling price is increased from $18 to $20. b. Unit variable expenses are decreased from $12 to $10. c. Fixed expenses are increased by $3,000 per period. d. Two thousand more units are sold during the period than were budgeted. e. Due to paying salespersons a commission rather than a flat salary, fixed expenses are reduced by $8,000 per period and unit variable expenses are increased by $3. f. Due to an increase in the cost of materials, both unit variable expenses and the selling price are increased by $2. g. Advertising costs are increased by $10,000 per period, resulting in a 10% increase in the number of units sold. h. Due to automating an operation previously done by workers, fixed expenses are increased by $12,000 per period and unit variable expenses are reduced by $4
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