The smarter way
to do assignments.

Please note that this is just a preview of a school assignment posted on our website by one of our clients. If you need assistance with this question too, please click on the Order button at the bottom of the page to get started.

BREAKEVEN AND OPERATING LEVERAGEa. Given the following graphs, calculate the total fixed costs, variable costs per unit, and sales price for Firm A. Firm Bs fixed costs are \$120,000, its variable costs per unit are \$4, and its sales price is \$8 per unit.b. Which firm has the higher operating leverage at any given level of sales? Explain.c. At what sales level, in units, do both firms earn the same operating profit?
(a) Total fixed cost for firm A (seen from graph) 80000 Variable cost at 25000 units was (200000-80000) i.e. 120000….Per unit is 120000/25000 = 4.80 per unit Sale price per unit 200000/25000 = 8 per unit (b) Firm B has higher operating leverage (as it has higher level of FIXED COSTS) (c)…

rence point is Computed as (Difference in FIXED COST) / (Difference in CONTRIBUTION PER UNIT)= (120000-80000)/ (4-3.20)=40000/0.80 = 50000 units At this level both firms earn same profit of Rs. 80000

## GET HELP WITH THIS ASSIGNMENT TODAY

Clicking on this button will take you to our custom assignment page. Here you can fill out all the additional details for this particular paper (grading rubric, academic style, number of sources etc), after which your paper will get assigned to a course-specific writer. If you have any issues/concerns, please don’t hesitate to contact our live support team or email us right away.