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Witt's Cabinets sells kitchen cabinets for $ 9 0 0 per unit. The company will manufacture the cabinets for $ 7 8 0 each. Assume
Witt's Cabinets sells kitchen cabinets for $ per unit. The company will manufacture the cabinets for $ each.
Assume no other costs.
Witt's Cabinets has two options for renting a warehouse for selling the cabinets:
A of total revenues earned during the selling period.
B A fixed payment of $ for the selling period.
Required
For both rental options, calculate the breakeven point in units & dollars.
For both rental options, calculate the degree of operating leverage if units are sold.
Why are the answers for # different? Explain.
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