Integrated Manufacturing Inc. uses CVP tools to analyze overall costs. Total costs for the period were $100,000. Total sales for the period were $105,000, and the variable cost per unit was $60. Integrated sold 700 units this period.
a. What is Integrated's break-even point in units?
b. What is Integrated's break-even point in Sales Dollars?
c. What’s the Inegrated’s operating leverage for the year?
d. If next year Integrated plans to have an increase in sales by 8%, by how much would its operating income increase?
e. If Integrated’s competitor Texas Tech Inc. has a degree of operating leverage as 10, which company has the higher operating risk?