Degree of operating leverage—Graphical Levin Corporation has fixed operating costs of $72,000,… 1 answer below »
Degree of at-liberty leverage—Graphical Levin Corporation has unwandering at-liberty costs of $72,000, changeable at-liberty costs of $6.75 per deal-out, and a selling value of $9.75 per deal-out.
a. Calculate the at-liberty breakeven sharp-end in deal-outs.
b. Compute the measure of at-liberty leverage (DOL) for the subjoined deal-out sales levels: 25,000, 30,000, 40,000. Use the formula absorbed in the condition.
c. Graph the DOL figures that you computed in deal-out b (on the y axis) resisting sales levels (on the x axis).
d. Compute the measure of at-liberty leverage at 24,000 deal-outs; add this sharp-end to your graph.
e. What motive do your graph and figures exemplify?