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Accounting

Problem:

Alpha Co. is thinking of buying a new widget forger. It will cost $12,000 per month to buy it, set it up hire and train new staff and compensate Alpha for the space it will need. These widgets will sell for $6.00 each and have variable cost $3.00 each. Alpha's sales forecast is for 6,000 units per month.

Required:

Question 1: What is the forecast monthly profit?

Question 2: What is the breakeven quantity?

Question 3: What is the Degree of Operating Leverage?

Note: Please show guided help with steps and answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167553

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