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The C&D TV store currently has fixed costs of $6,000 per month and $400 per TV set. Their sales price for the TV sets is
The C&D TV store currently has fixed costs of $6,000 per month and $400 per TV set. Their sales price for the TV sets is $700 each, and their current volume is 25 sets per month.
a) Find C&Ds break-even point and their NOI and DOL at the current level of sales (20 units per month, NOI=$1,500, and DOL=5).
b) Find C&Ds break-even point and their NOI and DOL if fixed costs decrease to $4,750 and at the same time the cost of TV sets rises to $450 (19 units per month, NOI=$1,500, and DOL=4.1667).
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