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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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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
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