Superior door company sells pre-hung doors to home builders

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Reference no: EM13601393

Superior Door Company sells pre-hung doors to home builders. The doors are sold for $60 each. Variable costs are $42 per door and fixed costs total $450,000 per year. The company is currently selling 30,000 doors per year.

1. Management is confident that the company can cell 37,500 total doors next year (an increase of 7,500 doors, or 25% over current sales). Compute the expected operating income for next year. (Do NOT prepare an income statement; use the degree of operating leverage to compute your answer)

Reference no: EM13601393

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