If a firm sells 40,000 units and the contribution margin on the firm's single product is $4.00 per unit and fixed costs are $60,000, what is the firm’s breakeven point in units?
A. 100,000 units
B. 15,000 units
C. 60,000 units
D. 40,000 units
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If sales units exceeds the break-even point in units, the firm will experience
A. an operating loss.
B. an operating profit.
C. an increase in plant and equipment
D. an increase in stock price
If fixed costs rise while other variables stay constant
A. the break-even point rises
B. the degree of operating leverage increases.
C. total profit declines.
D. All of the options are true.
If a firm has fixed costs of $30,000, a variable cost per unit of $.75, and a break-even point of 5,000 units, the sales price per unit is _____.
A. $2.5
B. $6.75
C. $4.0
D. $4.5
A high degree of operating leverage means
A. there are high labor costs
B. there is high debt
C. there is a large amount of equity.
D. there are high fixed costs.