At an output level of 84,000 units, you calculate that the degree of operating leverage is 1.80. Suppose fixed costs are $180,000. a. What is the operating cash flow at 78,000 units? b. What is the degree of operating leverage?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
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Accounting provide a. b calculation

At an output level of 84,000 units, you
calculate that the degree of operating
leverage is 1.80. Suppose fixed costs are
$180,000.
a. What is the operating cash flow at 78,000
units?
b. What is the degree of operating leverage?
Transcribed Image Text:At an output level of 84,000 units, you calculate that the degree of operating leverage is 1.80. Suppose fixed costs are $180,000. a. What is the operating cash flow at 78,000 units? b. What is the degree of operating leverage?
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