90.2K

Verified Solution

Link Copied!

(Operating leverage) The C. M. Quarles Distributing Company manufactures an assortment of cold air intake systems for high-performance engines. The average selling price for the various units is $650. The associated variable cost is $300 per unit. Fixed costs for the firm average $180,000 annually.

a. What is the break-even point in units for the company?

b. What is the dollar sales volume the firm must achieve to reach the break-even point? c. What is the degree of operating leverage for a production and sales level of 5,000 units for the firm? (Calculate to three decimal places.)

d. What will be the projected effect on earnings before interest and taxes if the firm's sales level should increase by 30 percent from the volume noted in part c?

a. What is the break-even point in units for the company? units (Round to the nearest whole number.)

(Operating leverage) The C. M. Quarles Distributing Company manutactures an assortment of cold air intake systems for high-performance ongines. The avorage seling price for the various units is $650. The associated variable cost is $300 per unit. Fixed costs for the firm averago $180,000 annually a. What is the broak-even point in units for the company? b. What is the dollar sales volume the firm must achieve to reach the break-oven point? c. What is the degree of operating loverage for a production and salos level of 5.000 units for the firm? (Calculate to three decimal places.) d. What wil be the projecied effect on earnings before interest and taxes if the firm's sales levol should increase by 30 percent from the volume noted in part c ? a. What is the break-even point in units for the company? units. (Round to the nearest whole number.)

Answer & Explanation Solved by verified expert

See Answer