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What will happen to EBIT

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QUESTION - OPERATING LEVERAGE

A Firm sells its products for $50 per unit has variable operating costs of $30 per unit and fixed operating cost of $5000 per year. Its current level of sales is 300 units. We wish to ascertain the firm‘s degree of operating leverage. What will happen to EBIT if sales change? Let us suppose that the sales level (a) rises to 350 units, and (b) decrease to 250 units.

Reference no: EM132174313

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