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Bamboo Manufacturing Sells Its Finished Product for an Average of $35

Question 106

Essay

Bamboo manufacturing sells its finished product for an average of $35 per unit with a variable cost per unit of $21. The company has fixed operating costs of $1,050,000.
(a) Calculate the firm's operating breakeven point in units.
(b) Calculate the firm's operating breakeven point in dollars.
(c) Using 100,000 units as a base, what is the firm's degree of operating leverage?

Correct Answer:

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(a) Q = blured image = blured image = 75,000 units
(b)...

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