Assuming that The Paint company sells a unit of paint for Re 0.50 each. The manufacturing and
Question:
Assuming that The Paint company sells a unit of paint for Re 0.50 each. The manufacturing and distribution costs per unit of paint is Re 0.20. The company has a fixed operating cost of Rs 5,500 and a fixed financing cost of Rs 4000.
1. Estimate and interpret the company’s degree operating leverage at 50,000 units produced and sold with 51000 units produced and sold.
2. Estimate and interpret the company’s degree of financial leverage at 50,000 units produced and sold with 51000 units produced and sold.
3. Estimate and interpret the company’s degree of combined (total) leverage at 50,000 units produced and sold with 51000 units produced and sold.
College Mathematics for Business Economics Life Sciences and Social Sciences
ISBN: 978-0321614001
12th edition
Authors: Raymond A. Barnett, Michael R. Ziegler, Karl E. Byleen