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Klio2033 [76]
3 years ago
11

Frontier Corp. sells units for $57, has unit variable costs of $29, and fixed costs of $164,000. If Frontier sells 10,000 units,

what is its degree of operating leverage?
Business
1 answer:
jeka943 years ago
6 0

Answer:

2.4

Explanation:

Frontier corporation sells unit for $57

The unit variable cost is $29

Fixed cost is $164,000

Frontier sells 10,000 units

The first step is to calculate the contribution margin

= 57-29×10,000

= 28×10,000

= 280,000

Profit = 280,000-164,000

= 116,000

Degree of operating leverage can be calculated as follows

= 280,000/116,000

= 2.4

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3 0
3 years ago
Read 2 more answers
Most economists believe that prices are:
BaLLatris [955]

Answer: Most economist believe that prices are flexible in the long run but many are sticky in the short run.

Explanation:

Prices are sticky in the short run because producers and buyers take time to adapt to new situations. If there is a shortage of butter, lets say, the economic theory says that the prices will rise because there is less butter ( ceteris paribus = all the other factors remain constant). Actually, buyers and suppliers need time to adapt to the new situation. However, in the long run buyers and suppliers have time to adapt to new situations so prices become more flexible.

8 0
3 years ago
A certain bookstore chain has two stores, one in San Francisco and one in Los Angeles. It stocks three kinds of books: hardcover
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Answer:

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San Francisco 3,600           7,800       12,000  

Los Angeles  2,400            1,800        3,000

Explanation:

The sales during January were as follows:

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San Francisco 600              1,300           2,000  

Los Angeles  400                300              500

If the sales during the next five months were actually the same, then to determine total sales all we have to do is multiply January's sales by 6.

600 x 6 = 3,600         1,300 x 6 = 7,800         2,000 x 6 = 12,000

400 x 6 = 2,400           300 x 6 = 1,800            500 x 6 = 3,000

7 0
3 years ago
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On January 1, 2016, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truc
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Answer:

D.Gain, $5,000.

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Annual depreciation =   ( $48,000 -   $8,000) / 8 = $40,000 / 8= $5,000

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Second year (2014) = $35,000 - $5,000 =  $30,000

Third year (2015)= $30,000 - $5,000 =  $25,000

Gain  = Sale Value - Truck Value (actual) = $30,000 - $25,000 = $5,000

8 0
3 years ago
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