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The Fulcrum Company produces decorative swivel platforms for home televisions. If Fulcrum produces 4 0 million units, it estimates that it can sell them for
The Fulcrum Company produces decorative swivel platforms for home televisions. If Fulcrum produces million units, it estimates
that it can sell them for $ each. The variable production costs are $ per unit, whereas the fixed production costs are $
billion. Which of the following statements is true?
A Increasing the fixed production costs by percent will result in a lower sensitivity of operating earnings to changes in units
produced and sold.
B The Fulcrum Company's degree of operating leverage is
C If the Fulcrum Company increases production and sales by percent, its operating earnings are expected to increase by
percent.
D The Fulcrum Company produces a positive operating income if it produces and sells more than million swivel platforms.
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