At a price of 48 the estimated monthly sales of a product


Question - At a price of $48, the estimated monthly sales of a product are 18,000 units. Variable costs include manufacturing costs of $27 and distribution costs of $9. Fixed costs are $60,000 per month  

  • determine the degree of operating leverage
  • if it is expected that sales will drop by 5% how would operating income change
  • determine the units that must be sold to ear a before tax profit of $48,000.

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Accounting Basics: At a price of 48 the estimated monthly sales of a product
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