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Narchie sells a single product for $50. Variable costs are 60% of the selling price, and...

Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 36,000 units.

A. In order to produce a target profit of $22,000, Narchie's dollar sales must total:

B. If Narchie sells 24,000 units, its safety margin will be:

C. What is Narchie’s operating leverage?

D. Determine whether the actions that follow will increase, decrease, or not affect the company's break-even point.

1. A decrease in tour prices.
2. The termination of a salaried clerk (no replacement is planned).
3. A decrease in the number of units sold.

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