Company x produces tea kettles which it sells for 12 each, Ask an Expert

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Company X produces tea kettles, which it sells for $12 each. Fixed costs are $650,000 for up to 400,000 units of output. Variable costs are $8 per kettle.

a. What is the breakeven point?

b. What is Company X's degree of operating leverage at a sales level of 200,000 units? Interpret the meaning of the DOL?

c. If sales increase by 10%, how much will EBIT change?

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Category:- Corporate Finance
Reference No.:- M9525164

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