(Break-even point and operating leverage) Allison Radiosmanufactures a complete

Question

(Break-even point and operating leverage) Allison Radiosmanufactures a complete line of radio and communication equipmentfor law enforcement agencies. The average selling price of itsfinished product is $180 per unit. The variable cost for the sameunits is $126. Allison Radios incurs fixed costs of $540,000 peryear.

a. Whatis the break-even point in units for the company?

b. Whatis the dollar sales volume the firm must achieve in order to reachthe break-even point?

c. Whatwould be the firm’s profit or loss at the following units ofproduction sold: 12,000 units? 15,000 units? 20,000units?

d. Findthe degree of operating leverage for the production and saleslevels given in part (c).

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(Break-even point and operating leverage) Allison Radiosmanufactures a complete

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