Duxbury Co

question 177

Essay

Duxbury Co.reports the following data for the current year:
Units Sold ………………………………………..1,200
Unit Sales Price ………………………………………..$30
Unit Variable Cost ……………………………………….. $10
Total Fixed Cost……………………………………….. $18,000
Required:
(a)Calculate Duxbury's pretax income.
(b)Calculate Duxbury's degree of operating leverage.

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Definitions:

Video Game Rentals

A service that allows consumers to borrow video games for a limited period of time for a fee.

Pokemon Cards

Collectible cards based on the Pokémon franchise, used for playing the Pokémon Trading Card Game.

Production Possibilities Curve

A graphical representation showing the maximum combination of goods and services that can be produced with a fixed amount of resources.

Capacity

The maximum output level that a firm, industry, or economy can sustain under the current conditions.