Finding degree of operating leverage at financial break-even


Q1) In each of the following cases, determine unknown variable:

Accounting Break-Even Unit Price  Unit Variable Cost  Fixed Costs  Depreciation 
127,500 $41 $30 $820,000
135,000 43 3,200,000 $1,150,000
5,478 98 160,000 105,000

Project has given estimated data: price=$68 per unit; variable costs=$41 per unit: fixed costs=$8,000; required return=15 percent; initial investment=$12,000; life=four years. Ignoring effect of taxes, detemining accounting break-even quantity? Cash break-even quantity? Financial break-even quantity? Determine degree of operating leverage at financial break-even level of output?

Let a project with following data:

accounting break-even quantity=17,000 units;

cash break-even quantity=12,000 units;

life=five years;

fixed costs=$130,000;

variable costs=$23 per unit;

required return=16 percent.

Ignoring effect of taxes, determine financial break-even quanity

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Accounting Basics: Finding degree of operating leverage at financial break-even
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