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I need help with c and d Operating Leverage 13-7. Use the same data given in problem 135 (fixed cost =$20,000 per year, variable cost
I need help with c and d
Operating Leverage 13-7. Use the same data given in problem 135 (fixed cost =$20,000 per year, variable cost =$16 per unit, and sales price =$28 per unit) for Howard Beal Co. The company sold 3,000 units in 2021 and expects to sell 3,300 units in 2022. Fixed costs, variable costs per unit, and sales price per unit are assumed to remain the same in 2021 and 2022. a. Calculate the percentage change in operating income and compare it with the percentage change in sales. b. Comment on the operating leverage effect. c. Calculate the degree of operating leverage using 1. data for 2021 and 2022 2. data for 2021 only d. Explain what the results obtained in (c) tell usStep by Step Solution
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