BREAKEVEN AND OPERATING LEVERAGE
a. Given the following graphs calculate the total fixed costs, variable costs per
Unit and sales price for Firm A.Firm B’s fixed costs are $120000, its variable
Costs per unit are $4, and its sales price is 48 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?
Revenues
Costs
Break-Even Point