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The Quarles Distributing Company manufactures an assortment of cold air intake systems for high-performance engines. The...

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Finance

The Quarles Distributing Company manufactures an assortment ofcold air intake systems for high-performance engines. The averageselling price for the various units is $600. The associatedvariable cost is $250 per unit. Fixed costs for the firm average$190,000 annually.

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

b. What is the dollar sales volume the firm must achieve toreach the break-even point?

c. What is the degree of operating leverage for a production andsales level of 3,000 units for the firm? (Calculate to threedecimal places.)

d. What will be the projected effect on earnings before interestand taxes if the firm's sales level should increase by 50 percentfrom the volume noted in part (c)? (Need tp be a percentage)

Answer & Explanation Solved by verified expert
4.4 Ratings (955 Votes)
Answer of Part a Contribution Margin per unit Sales per unit Variable cost per unit Contribution Margin per unit 600 250 Contribution Margin per unit 350 Break Even point in units Fixed Costs    See Answer
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