Finding the Break-Even Point in Units of Output for the Firm
I am an analyst in the office of financial operations for a manufacturing firm that produces a single product. I have developed the following cost structure information for this company. All of it pertains to an output level of 10 million units.
Using this information, find the break-even point in units of output for the firm.
Return on operating assets = 25%
Operating asset turnover = 5 times
Operating assets = $20 million
Degree of operating leverage = 4 times
Please show work so that I can understand how the numbers are achieved.
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Solution Summary
This solution assists with determining the break-even point int he units of output for the given firm.
$2.19