Question
At an output level of 15,000 units, you have calculated that the degree of operating leverage is 2.61. The operating cash flow is $57,000 in
At an output level of 15,000 units, you have calculated that the degree of operating leverage is 2.61. The operating cash flow is $57,000 in this case. Ignoring the effects of taxes, what are the fixed costs (FC)? What will the operating cash flow (OCF) be if output rises to 16,000 units?
| A.FC = $148,770 OCF = $63,118.00 |
| B.FC = $91,770 OCF = $66,969.30 |
| C.FC = $91,770 OCF = $158,739.30 |
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Financial accounting
Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas
8th Edition
9780135114933, 136108865, 978-0136108863
