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Modern Artifacts can produce keepsakes that will be sold for $130 each. Nondepreciation fixed costs are $2,000 per year, and variable costs are $80 per
Modern Artifacts can produce keepsakes that will be sold for $130 each. Nondepreciation fixed costs are $2,000 per year, and variable costs are $80 per unit. The initial Investment of $6,000 will be depreciated straight-line over its useful life of 3 years to a final value of zero, and the discount rate is 14%. a. What is the degree of operating leverage of Modern Artifacts when sales are $11.050? (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 $17,810? (Do not round Intermediate calculatlons. 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 higher when profits are lower
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