The Niendorf Corporation produces tea kettles, which it sells for $15 each. Fixed costs are $700,000 for

Question:

The Niendorf Corporation produces tea kettles, which it sells for $15 each. Fixed costs are $700,000 for output up to 400,000 units. Variable costs amount to $10 per kettle.

a. What is the firm’s gain or loss at sales of 125,000 units? Of 175,000 units?

b. What is the breakeven point? Illustrate your answer with a graph.

c. What is Niendorf’s degree of operating leverage at sales of 150,000 units? Of 175,000 units?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...