Question: Given the following data, answer the questions below the table: ---------------------------------------------------------------------------------------------------------------------- Data Unit sales 30,000 units Selling price per unit $10 per unit Variable expenses

  1. Given the following data, answer the questions below the table:

----------------------------------------------------------------------------------------------------------------------

Data

Unit sales

30,000

units

Selling price per unit

$10

per unit

Variable expenses per unit

$5

per unit

Fixed expenses

$120,000

----------------------------------------------------------------------------------------------------------------------

a) What is the break-even in dollar sales?

b) What is the margin of safety percentage?

c) What is the degree of operating leverage? (Round your final answer to 2 decimal places.)

d) Using the degree of operating leverage, calculate the percentage change in net operating income if unit sales increase by 20%.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!