Question
Diagramtically explain the break even analysis. The following information is extracted from the income statement of Al Hajir Private Ltd. The Price (P) per unit
Diagramtically explain the break even analysis. The following information is extracted from the income statement of Al Hajir Private Ltd. The Price (P) per unit of product is OMR 8 and Variable cost (VC) per unit is OMR 4 and fixed operating cost is OMR 4,000.Answer the following question after analyzing the given table. YEAR 1 YEAR 2 Sales (in units) 3,000 4,500 Sales Revenue (in OMR) 24,000 ? Less: Variable operating costs 12,000 ? Less: Fixed operating costs 4,000 4,000 Earnings before interest and taxes (EBIT) 8,000 ? a. Complete the table for the year 2 b. Calculate the Degree of Operating Leverage (DOL). c. Interpret your answer (DOL)
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