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Modern Artifacts can produce keepsakes that will be sold for $130 each. Nondepreciation fixed costs are $1,600 per year, and variable costs are $80 per
Modern Artifacts can produce keepsakes that will be sold for $130 each. Nondepreciation fixed costs are $1,600 per year, and variable costs are $80 per unit. The initial investment of $4,800 will be depreciated straight-line over its useful life of 6 years to a final value of zero, and the discount rate is 13%. a. What is the degree of operating leverage of Modern Artifacts when sales are $7,020? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Degree of operating leverage b. What is the degree of operating leverage when sales are $13,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Degree of operating leverage c. Why is operating leverage different at these two levels of sales? Degree of operating leverage is when profits are .____________
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