Compute the company operating leverage

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Reference no: EM132762629

Problem - Special Cost-Volume-Profit Relationships - Blueberry Inc., a consumer electronics company, manufactures and sells two products, smartphones and tablet computers. The unit selling price, unit variable cost, and sales mix for each product are as follows:

Products

Unit Selling Price

Unit Variable Cost

Sales Mix

Smartphone

$650

$560

60%

Tablet

550

475

40%

The company's fixed costs are $4,200,000.

Required -

a. How many units of each product would be sold at the break-even point?

b1. Assume Blueberry sells 37,500 smartphones and 25,000 tablets during a recent year. Compute the company's (1) operating leverage.

b2. Assume Blueberry sells 37,500 smartphones and 25,000 tablets during a recent year. Compute the company's (2) margin of safety.

Reference no: EM132762629

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