Question
Modern Artifacts can produce keepsakes that will be sold for $92 each. Nondepreciation fixed costs are $1,100 per year, and variable costs are $66 per
Modern Artifacts can produce keepsakes that will be sold for $92 each. Nondepreciation fixed costs are $1,100 per year, and variable costs are $66 per unit. The initial investment of $4,200 will be depreciated straight-line over its useful life of five years to a final value of zero, and the discount rate is 10%.
A. What is the degree of operating leverage of Modern Artifacts when sales are $7,360?
Note: Round your answer to 1 decimal place.
B. What is the degree of operating leverage when sales are $12,880?
Note: Round your answer to 1 decimal place.
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