# 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?

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?

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