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Determine the degree of operating leverage

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Reference no: EM131749370

Question - At a price of $48, the estimated monthly sales of a product are 18,000 units. Variable costs include manufacturing costs of $27 and distribution costs of $9. Fixed costs are $60,000 per month  

  • determine the degree of operating leverage
  • if it is expected that sales will drop by 5% how would operating income change
  • determine the units that must be sold to ear a before tax profit of $48,000.

Reference no: EM131749370

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