Level of production will operating leverage


Problem:

The sales price is $10 per unit and the variable cost is $8 per unit. The fixed cost is $1,000.

Required:

At what level of production will operating leverage be 1.5?

  • 1,000
  • 1,500
  • 2,000
  • 2,500

Note: Be sure to show how you arrived at your answer.

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Accounting Basics: Level of production will operating leverage
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