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What is the degree of operating leverage for each of the products for 2019? Della Valle reports its financial results on a divisional basis. Currently,
What is the degree of operating leverage for each of the products for 2019?
Della Valle reports its financial results on a divisional basis. Currently, the three brands of sneakers that Della Valle produces, and sells are the Smash Hit, the Air Max and the Hogan. Della Valle's financial team has been working on a cost budget modeling by division for 2019. Below is the most recent selling price and cost information for Della Valle as of the beginning of 2019. Smash hit Air max Hogan $ 70.00 $ 130.00 $ 145.00 Selling price/unit Costs/unit Cloth insert Direct Labor Factory Equipment Depreciation Factory Insurance Factory Rent Glue for shoe Logos Rubber sole Shoe laces Shoe leather Shoe stiching Smash hit Air max Hogan 1.00 $ 5.00 $ 5.00 $ 20.00 $ 60.00 $ 50.00 0.02 $ 0.04 $ 0.04 $ 0.03 $ 0.03 $ 0.03 2.00 $ 2.00 $ 2.00 $ 0.01 $ 0.02 $ 0.03 $ 0.01 $ 0.03 $ 0.01 5.00 $ 15.00 $ 20.00 $ 0.02 $ 0.03 $ 0.03 $ 10.00 $ 20.00 $ 30.00 $ 0.05 $ 0.15 $ 0.25 Other costs - total per MONTH: Advertising/Promotion Corporate office rent/utilities Selling General & Administrative Payroll Smash hit Air max Hogan $ 2,000 $ 5,000 $ 3,500 $ 10,000 $ 10,000 $ 10,000 $ 30,000 $ 30,000 $ 30,000 In addition, you have been given the following information for year 2019: You do not have to factor in income taxes for Della Valle . Units actually sold in 2019 by product are as follows: Smash hit 40,000 Air max 25,000 Hogan 15,000 Total 80,000 Units sold 2019Step by Step Solution
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