Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mr. Duster wants to open a new vacuum store called the Pick-up in a nearby plaza. Mr. Duster will be selling vacuums for $200 each.

image text in transcribed

Mr. Duster wants to open a new vacuum store called the Pick-up in a nearby plaza. Mr. Duster will be selling vacuums for $200 each. Variable costs (not including the leasing costs below) are $94 for every vacuum. There are no fixed costs, other than the leasing costs below. In terms of lease payments, the plaza has provided him three options: Pay $33 per vacuum sold $16,000 per month $20,000 per month and $12 per vacuum sold Do not enter dollar signs or commas in the input boxes. Use the negative sign for negative values. Round all answers to the nearest whole number. Calculate the monthly operating income for each of the three options if 400 units are sold and if 770 units are sold. At a production level of 770 units, which option should be recommended? Option: Calculate the degree of operating leverage for the second lease option if Mr. Duster sells 770 vacuums. Round your answer to 2 decimal places. Degree of Operating Leverage

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

Step: 3

blur-text-image

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

Cloud Audit Toolkit For Financial Regulators

Authors: Asian Development Bank

1st Edition

9292692089, 978-9292692087

More Books

Students also viewed these Accounting questions

Question

Find the value of the angles X and Y in the following diagrams:

Answered: 1 week ago

Question

explain the need for human resource strategies in organisations

Answered: 1 week ago

Question

describe the stages involved in human resource planning

Answered: 1 week ago