- Question 3 6 Points The Following Information And Questions Pertain To Milo And Mitch S Design Company Milo And Mitch S 1 (61.74 KiB) Viewed 35 times
Question 3 6 Points The following information and
questions pertain to Milo and Mitch's Design
Company Milo and Mitch's Design
Company is a new firm just starting operations. The firm will produce shelving units that will sell for $22.00 a piece. Fixed costs are $500,000 per year, and variable costs are $2.00 per unit of production. The
company expects to sell 50,000 shelving units per year, and its marginal tax rate is 40 percent. 1. What is Milo and Mitch's Design's degree of operating leverage at the expected level of sales? (2 Marks) 2. Based on the information about Milo and Mitch's Design
Company what is Milo and Mitch's breakeven quantity of sales? (2 Marks) 3. Based on the information about Milo and Mitch's Design
Company, and if Milo and Mitch's Design
Company has $25,000 Interest and $500,000 EBIT, what is the firm's degree of financial leverage? (2 Marks) Use the editor to format your answer