Question: Modern Artifacts can produce keepsakes that will be sold for $ 1 0 0 each. Nondepreciation fixed costs are $ 1 , 1 0 0

Modern Artifacts can produce keepsakes that will be sold for $100 each. Nondepreciation fixed costs are $1,100 per year, and variable
costs are $74 per unit. The initial investment of $4,800 will be depreciated straight-line over its useful life of five years to a final value
of zero, and the discount rate is 10%.
a. What is the degree of operating leverage of Modern Artifacts when sales are $8,500?
Note: Round your answer to 1 decimal place.
b. What is the degree of operating leverage when sales are $14,500?
Note: Round your answer to 1 decimal place.
 Modern Artifacts can produce keepsakes that will be sold for $100

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 Finance Questions!