What is degree of operating leverage

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Reference no: EM131973178

Modern Artifacts can produce keepsakes that will be sold for $240 each. Nondepreciation fixed costs are $3,600 per year, and variable costs are $140 per unit. The initial investment of $10,800 will be depreciated straight-line over its useful life of 3 years to a final value of zero, and the discount rate is 8%.

a. What is the degree of operating leverage of Modern Artifacts when sales are $17,760? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. What is the degree of operating leverage when sales are $35,280? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM131973178

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