What production level should the company switch

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Reference no: EM13159185

Degree of Operating Leverage Problem

Production = 1000 units
P = $5
FC = $1450
VC = 2.75

Calculate the DOL and the break even point. Is the company breaking even yet?

If the company installs new equipment, FC rise to $2000 and AVC drops to $2.25, what is the break-even point and at what production level should the company switch from the old machine to the new?

Reference no: EM13159185

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