Operating leverage at the accounting break-even point

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Reference no: EM13769385

We are evaluating a project that costs $573,000, has a six-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 75,000 units per year. Price per unit is $46, variable cost per unit is $31, and fixed costs are $825,000 per year. What is the degree of operating leverage at the accounting break-even point?

A. 5.984

B. 6.548

C. 7.522

D. 8.143

Reference no: EM13769385

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