Answer:
400 units
Explanation:
price per unit $40
variable costs per unit $20
fixed expenses $8,000
operating leverage = fixed costs / total costs
- operating leverage = 2
- fixed costs = $8,000
- total costs = ($8,000 + total variable costs)
2 = $8,000 / ($8,000 + total variable costs)
2($8,000 + total variable costs) = $8,000
$4,000 + 0.5(total variable costs) = $8,000
0.5(total variable costs) = $4,000
total variable costs = $4,000/0.5 = $8,000
total variable costs = total output x variable cost per unit
$8,000 = total output x $20
total output = $8,000 / $20 = 400 units
