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Calculate the operating income of a manufacturing company

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Question - Within a relevant range we can assume that total costs, both variable and fixed, behave in a linear manner. Furthermore, suppose that everything produced is sold in its entirety. Based on these assumptions:

1. What would be the basic formula to calculate the operating income of a manufacturing company?

2. What would be the basic formula for the break-even point in terms of units (break-even-point)? The elements you should take into consideration in the formula are: units produced and sold, variable costs, fixed costs.

Reference no: EM133085932

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