Question
The Quarles Distributing Company manufactures an assortment of cold air intake systems for high-performance engines. The average selling price for the various units is $600.
The Quarles Distributing Company manufactures an assortment of cold air intake systems for high-performance engines. The average selling price for the various units is $600. The associated variable cost is $450 per unit.Fixed costs for the firm average $200,000 annually.
a. What is the break-even point in units and dollars for the company?
b. What is the dollar sales volume the firm must achieve to reach the break-even point?
c. What is the degree of operating leverage for a production and sales level of 5,000 units for the firm? (Calculate to three decimal places.)
d. How many units should be sold out to get out from loss?
e. Without calculation tell that either company will earn profit or suffer loss if it sold 1500 units.Discuss in very few words.
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