Question
Roman Inc sells a product for $60 per unit. Variable expenses are $33 per unit, and fixed expenses are total $108,000 per month. The company
Roman Inc sells a product for $60 per unit. Variable expenses are $33 per unit, and fixed expenses are total $108,000 per month. The company is currently selling 8,000 units per month.
(a) How many units would have to be sold if the selling price is reduced by 10% to yield a minimum net operating income of $35,000 per month.
b)According to the data, if the fixed expenses remain unchanged, selling price is reduced by 10% and total monthly unit sales are increased by 25%, the net operating income will be $?
c)what will be the degree of operating leverage ?
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