The Funky Ties Company sells novelty neckties for men. They have variable costs per tie of $5.00 and fixed costs of $26,000 per year. Funky sells the ties for $20 each and sells 3,000 ties per year. Answer the following questions: Calculate Funky’s breakeven point in unit sales. Calculate the degree of operating leverage, If Funky has financed partially with debt and has annual interest cost of $1,000, what is its degree of financial leverage? Calculate the degree of total leverage,
The Funky Ties Company sells novelty neckties for men. They have variable costs per tie of $5.00 and fixed costs of $26,000 per year. Funky sells the ties for $20 each and sells 3,000 ties per year. Answer the following questions: Calculate Funky’s breakeven point in unit sales. Calculate the degree of operating leverage, If Funky has financed partially with debt and has annual interest cost of $1,000, what is its degree of financial leverage? Calculate the degree of total leverage,
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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The Funky Ties Company sells novelty neckties for men. They have variable costs per tie of $5.00 and fixed costs of $26,000 per year. Funky sells the ties for $20 each and sells 3,000 ties per year. Answer the following questions:
- Calculate Funky’s breakeven point in unit sales.
- Calculate the degree of operating leverage,
- If Funky has financed partially with debt and has annual interest cost of $1,000, what is its degree of financial leverage?
- Calculate the degree of total leverage,
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