Calculate the degree of operating leverage

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Reference no: EM13976312

PrepCo, Inc. is looking to find information on its breakeven point and associated measurements. The following is the data that PrepCo will use in its analysis:

Variable operating costs of $15 per unit

Fixed operating costs of $400,000

Selling price of $64.25

Calculate the units needs for PrepCo’s operating breakeven point

Calculate PrepCo’s EBIT at: 1) 9,500, 2) 10,500, and 3) 12,000 units

Calculate the degree of operating leverage for 10,500 and 12,000 based on a starting point of 9,500 used in part b.

Reference no: EM13976312

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