At an output level of 18,000 units, you have calculated that the degree of operating leverage is 2.10. The operating cash flow is $46,500 in this case. Ignore the effect of taxes. a.What are fixed costs? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)b.What will the operating cash flow be if output rises to 19,000 units? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)c.What will the operating cash flow be if output falls to 17,000 units? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Part 1: Answer:a. Fixed costs are $23,214.b. The operating cash flow will be $48,942.00 if output…

Answered: At an output level of 18,000 units, you…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

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Question

At an output level of 18,000 units, you have calculated that the degree of operating leverage is 2.10. The operating cash flow is $46,500 in this case. Ignore the effect of taxes.

a.	What are fixed costs? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
b.	What will the operating cash flow be if output rises to 19,000 units? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c.	What will the operating cash flow be if output falls to 17,000 units? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)