Question
The Fulcrum Company produces decorative swivel platforms for home televisions. If Fulcrum produces 40 million units, it estimates that it can sell them for $100
The Fulcrum Company produces decorative swivel platforms for home televisions. If Fulcrum produces 40 million units, it estimates that it can sell them for $100 each. Variable production costs are $65 per unit and fixed production costs are $1.05 billion. Which of the following statement is most accurate? Holding all else constant, the Fulcrum Company would:
A. | generate positive operating income if unit sales were $25 million. | |
B. | have less operating leverage if fixed production costs were 10 percent greater than $1.05 billion. | |
C. | generate 20 percent more operating income if unit sales were 5 percent greater than 40 million. | |
D. | generate 30 percent more operating income if unit sales were 10 percent greater than 50 million. |
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