document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=201431>Question 201431</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Hi can someone please help me solve for this problem, it's from the Financial Management: Principles and Application book by Keown ch. 15, study question 15-13A:\r<BR>\n" );
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document.write( "(Break-even point and operating leverage) 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.\r<BR>\n" );
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document.write( "a. What is the break-even point in units for the company?\r<BR>\n" );
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document.write( "b. What is the dollar sales volume the firm must achieve in order to reach the break-even point?\r<BR>\n" );
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document.write( "c. What would be the firm’s profit or loss at the following units of production sold:<BR>\n" );
document.write( "12,000 units? 15,000 units? 20,000 units? \r<BR>\n" );
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document.write( "d. Find the degree of operating leverage for the production and sales levels given in part (c).\r<BR>\n" );
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document.write( "Thank you </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #151659 by </B><A HREF=/tutors/aboutme.mpl?userid=rfer><B>rfer(16322)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=rfer><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=151659\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> A) 180x=540000+126x<BR>\n" );
document.write( "   180x-126x=540000<BR>\n" );
document.write( "    54x=540000<BR>\n" );
document.write( "      x=10000<BR>\n" );
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document.write( "B) 10000*126+540000=1,800,000<BR>\n" );
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document.write( "C)12000*180=2160000-540000-1512000=108000<BR>\n" );
document.write( "  15000*180=2700000-540000-1890000=270000<BR>\n" );
document.write( "  20000*180=3600000-540000-2520000=540000<BR>\n" );
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document.write( "D) I will let you do this part. </SPAN>\n" );
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