Break even point and operating leverage
Not what you're looking for?
(Break even point and operating leverage) Allison radio manufacture a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for the same units is $126. Allison radio incurs fixed cost of $540,000 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 of 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).
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation to answer
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 of 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).
Solution Preview
(Break even point and operating leverage) Allison radio manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for the same units is $126. Allison radio incurs fixed cost of $540,000 per year.
a) What is the break-even point in units for the ...
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.