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The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim...

The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $63.43. The variable cost per unit is $21.96, Poseidon Swim has average fixed costs per year of $5,193. Assume that the current level of sales is 439 units. What will be the resulting percentage change in EBIT if they expect units sold to changes by 8.0 percent? (You should calculate the degree of operating leverage first).

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Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

WE HAVE TO USE HERE 2 FORMULAS OF DOL [DEGREE OF OPERATING LEVERAGE]

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