Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Modern Artifacts can produce keepsakes that will be sold for $85 each. Nondepreciation fixed costs are $1,500 per year, and variable costs are $60 per

Modern Artifacts can produce keepsakes that will be sold for $85 each. Nondepreciation fixed costs are $1,500 per year, and variable costs are $60 per unit. The initial investment of $3,000 will be depreciated straight-line over its useful life of five years to a final value of zero, and the discount rate is 12%.

What is the degree of operating leverage of Modern Artifacts when sales are $7,820?

Note: Round your answer to 1 decimal place.

What is the degree of operating leverage when sales are $12,920?

Note: Round your answer to 1 decimal place.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Financial Management

Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao

14th edition

1337090581, 978-1337090582

More Books

Students also viewed these Finance questions

Question

the vast number of media options available

Answered: 1 week ago