Question
15-8A. (Break-even point and operating leverage) Some financial data for each of three firms are as follows: Average selling price per unit Average variable cost
15-8A. (Break-even point and operating leverage) Some financial data for each of three firms are as follows: Average selling price per unit Average variable cost per unit Units sold Fixed costs BLACKSBURG FURNITURE LEXINGTON CABINETS WILLIAMSBURG COLONIALS $ 15.00 $ 400.00 $40.00 $ 12.35 75.000 $35,000 $ 220.00 $14.50 4,000 13,000 $100,000 $70,000 a. What is the profit for each company at the indicated sales volume? b. What is the break-even point in units for each company? c. What is the degree of operating leverage for each company at the indicated sales volume? d. If sales were to decline, which firm would suffer the largest relative decline in profitability
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