Degree of operating leverage and degree of operating level

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Reference no: EM131065614

Modern Artifacts can produce keepsakes that will be sold for $250 each. Nondepreciation fixed costs are $3,000 per year, and variable costs are $150 per unit. The initial investment of $9,000 will be depreciated straight-line over its useful life of 9 years to a final value of zero, and the discount rate is 16%.

A) What is the degree of operating leverage of Modern Artifacts when sales are $11,250? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Degree of operating leverage ________________

B) What is the degree of operating leverage when sales are $19,500? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Degree of operating level ______________

Reference no: EM131065614

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