Question
Eliza Corp has provided the following forecast information for its Dog Product for 2019: Table 1: Source data for the Dog Product for 2019 Selling
Eliza Corp has provided the following forecast information for its Dog Product for 2019:
Table 1: Source data for the Dog Product for 2019
Selling price per unit | $260.00 |
Variable cost of goods sold per unit | $160.00 |
Fixed manufacturing costs | $8,000,000 |
Fixed selling and admin costs | $4,000,000 |
Units produced and sold | 200,000 |
Sensitivity analysis assessing the impact of operating leverage on net income.
Analysis of the change in net income from the following three what-if scenarios: What is the total monthly net income if sales increase by 50%? What is the total monthly net income if sales increase by 20%? What is the total monthly net income if sales decrease by 50%?
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