Allison Radios manufactures a complete line of radio and communication equipment for law agencies. The average selling

Question:

Allison Radios manufactures a complete line of radio and communication equipment for law agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison Radios incurs fixed costs of $540k per year.
a. What is the break-even point in units for the company?
b. What is the dollar sales volume the firm must achieve in order to reach the break-even point?
c. What would be the firm's profit or loss at the following units of production sold: 12,000 units? 15,000 units? 20,000 units?
d. Find the degree of operating leverage for the production and sales levels given in part c.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Management Principles And Applications

ISBN: 9780131450653

10th Edition

Authors: Arthur J. Keown, J. William Petty, John D. Martin, Jr. Scott, David F.

Question Posted: