Problem:
Alpha Co. is thinking of buying a new widget forger. It will cost $12,000 per month to buy it, set it up hire and train new staff and compensate Alpha for the space it will need. These widgets will sell for $6.00 each and have variable cost $3.00 each. Alpha's sales forecast is for 6,000 units per month.
Required:
Question 1: What is the forecast monthly profit?
Question 2: What is the breakeven quantity?
Question 3: What is the Degree of Operating Leverage?
Note: Please show guided help with steps and answer.