Finance
posted by michael .
Allison Radios manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison Radios incurs fixed costs of $540,000 per year.
a. What is the breakeven point in units for the company?
b. What is the dollar sales volume the firm must achieve in order to reach the breakeven
point?
c. What would be the firm’s profit or loss at the following units of production sold:
12,000 units? 15,000 units? 20,000 units?
d. Find the degree of operating leverage for the production and sales levels given in part c.

a. $S = $C,
180x = 126x + 540,000,
180x  126x = 540,000,
54x = 540,000,
X = 10,000 Units = Breakeven point.
b. S = 180 * 10,000 = $1,800,000 to breakeven.
c. Same procedure as a.
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