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BGB Tuna Processing manufactures and sells canned tuna. Variable cost per can amounts to $11 and the selling price of each can is $24. Total

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BGB Tuna Processing manufactures and sells canned tuna. Variable cost per can amounts to $11 and the selling price of each can is $24. Total annual fixed costs amount to $9,600,000. Sales are estimated to amount to 1,200,000 cans of tuna. Required a) If the company sells according to their estimates, what is the degree of operating leverage? b) How many cans of tuna does the company need to sell in order to break even? () If the company increases the sales volume (cans) by 25%, how much will operating income increase in dollars? In percentage change? Use the degree of operating leverage. 103

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