Fin370 Financial Management: 15-13A Allison Radios manufactures a complete line of radio
Fin370 Financial Management 15-13A. (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. Selling price per unit 180 Variable cost per unit 126 Contribution margin per unit 54 30% Fixed costs per year 540,000 a. What is the break-even point in units for the company? b. What is the dollar sales volume the firm must achieve in order to reach the break-even point? c. What would be the firm’s profit or loss at the following units of production sold: d. Find the degree of operating leverage for the production and sales levels given in part (c).
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