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Annie Kavitha
Annie Kavitha, Master's Degree
Category: Business and Finance Homework
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(operating leverage) Rocky Mount Metals Company manufactures

Resolved Question:

(operating leverage) Rocky Mount Metals Company manufactures an assortment of wood burning stoves. The average selling price for the various units is $500. The associated variable cost is $350 per unit. Fixed costs for the firm average is $180,000 annually.
a. What is the break- even point in units for the company?
b. What is the dollar sales volume the firm must acheive to reach the break-even point?
c. What is the degree of operating leverage for a production and sales level of 5,000 units for the firm? (Calculate to three deimcal places)
d. What will be the projected effect on earnings before interest and taxes if the Firm's sales level should increase by 20% from the volume noted in part c?
Show all necessary steps and explain how your answers were attained.
Submitted: 5 years ago.
Category: Business and Finance Homework
Expert:  Annie Kavitha replied 5 years ago.


Click on the link below for solution.

Customer: replied 5 years ago.
Will it be a hard task to transfer this to excel or better yet, will the answers be the same if it were done in Excel?
Expert:  Annie Kavitha replied 5 years ago.

It can be done in excel and the answer would be the same.

Customer: replied 5 years ago.

Will the format change in any way?


Expert:  Annie Kavitha replied 5 years ago.

No, I will redo it in excel and post the solution in just a short while.

Customer: replied 5 years ago.
I appreciate that. I will make that known from now on. Do I need to accept this one so you will get credit for it.
Expert:  Annie Kavitha replied 5 years ago.

Click on the link for solution in excel

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