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Modern Artifacts can produce keepsakes that will be sold for $120 each. Nondepreciation fixed costs are $1.800 per year, and variable costs are $70 per
Modern Artifacts can produce keepsakes that will be sold for $120 each. Nondepreciation fixed costs are $1.800 per year, and variable costs are $70 per unit. The initial investment of $5,400 will be depreciated straight-line over its useful life of 6 years to a final value of zero, and the discount rate is 18%. a. What is the degree of operating leverage of Modern Artifacts when sales are $7,440? (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 $12,000? (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 higher when profits lowej 17
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