PrepCo, Inc. is looking to find information on its breakeven point and associated measurements. The following is the data that PrepCo will use in its analysis:
· Variable operating costs of $15 per unit
· Fixed operating costs of $400,000
· Selling price of $64.25
a. Calculate the units needs for PrepCo's operating breakeven point
b. Calculate PrepCo's EBIT at: 1) 9,500, 2) 10,500, and 3) 12,000 units
c. Calculate the degree of operating leverage for 10,500 and 12,000 based on a starting point of 9,500 used in part b.