What is the degree of operating leverage of modern artifacts

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Reference no: EM131070602

Modern Artifacts can produce keepsakes that will be sold for $120 each. Nondepreciation fixed costs are $1,600 per year, and variable costs are $100 per unit. The initial investment of $4,800 will be depreciated straight-line over its useful life of 6 years to a final value of zero, and the discount rate is 20%.

a. What is the degree of operating leverage of Modern Artifacts when sales are $15,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. What is the degree of operating leverage when sales are $28,080? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Please specify answers to a and b.

Reference no: EM131070602

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