Describe degree of operating leverage

Reference no: EM1368055

Southcoast Oil's fixed costs are $2,500,000 and its debt repayment requirements are $1,000,000. Selling price per barrel of oil is $18 and variable costs per barrel are $10.

(a) Determine the breakeven output (in dollars).

(b) Determine the number of barrels of oil that offshore must produce and sell in order to earn a target (operating) profit of $1,500,000.

(d) Assuming that sales of oil are normally distributed with a mean of 362,500 barrels and a standard deviation of 100,000 barrels, determine the probability that Southcoast will incur an operating loss.

Note: Part (d) requires the use of statistical tables.

Reference no: EM1368055

Questions Cloud

Conclude the charge within a cubical box of side : In a certain region of space, the electric field, E, is constant in direction (say horizontally in the +x-direction), but its magnitude decreases.

Determine the effective annual cost : A Company is offered trade credit terms of 2/8, net 45. The company does not take the discount, and it pays after 58 days. Determine the effective annual cost of not taking this discount?

By how much does the potential energy of a child increase : A force vector has a magnitude of 594 newtons and points at an angle 37o of below the positive x axis. What are (1) the x scalar component and (2) the y scalar component of the vector.

Best practices for negotiation : Best practices for negotiation - What negotiation best practices have you learned and which best practices might you be able to apply in your work place

Describe degree of operating leverage : Southcoast Oil's fixed costs are $2,500,000 and its debt repayment requirements are $1,000,000. Selling price per barrel of oil is $18 and variable costs per barrel are $10.

Find x from n by n matrix of sorted integers : We want to find out if x is present in M. It is straightforward to do this in O(n log n) time. Explain such algorithm. (b) Can you do better? Describe your solution

Code of conduct of a business : Code of conduct of a business - An explanation of the value of ethical decision making from a human resources point of view

Find velocity v0 : A block rests on the frictionless horizontal surface and is attached to a spring. While set into simple harmonic motion, block oscillates back and forth with an angular frequency of 6.5 rad/s.

Holistic health and herbal medicine : Investigate alternative health care delivery systems like holistic health and herbal medicine.

User Account

All Pages