Question: Roman Inc sells a product for $60 per unit. Variable expenses are $33 per unit, and fixed expenses are total $108,000 per month. The company

Roman Inc sells a product for $60 per unit. Variable expenses are $33 per unit, and fixed expenses are total $108,000 per month. The company is currently selling 8,000 units per month.

(a) How many units would have to be sold if the selling price is reduced by 10% to yield a minimum net operating income of $35,000 per month.

b)According to the data, if the fixed expenses remain unchanged, selling price is reduced by 10% and total monthly unit sales are increased by 25%, the net operating income will be $?

c)what will be the degree of operating leverage ?

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!