IS-16B. (Operating leverage) The B. H. WiJliams Company manufactures an assortment of woodbuming stoves. The average selling

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IS-16B. (Operating leverage) The B. H. WiJliams Company manufactures an assortment of woodbuming stoves. The average selling price for the various units is $475. The associated variable cost is $350 per unit. Fixed costs for the firm average $200,000 annually.

a.ı What is the break-even point in units for the company?

b. What is the dollar sales volume the firm must achieve to reach the break-even point?

c.ı What is the degree of operating leverage for a production and sales level of 6,000 units for the finn? (Calculate to three decimal places.)
d.ı What will be the projected effect on earnings before interest and taxes if the firm's sales level should increase by 13 percent from the volume noted in part

(c) above?

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