Calculate the number of units that would need to be sold in September in order for the degree of operating leverage for September to be equal to 1.40.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Betty DeRose, Inc. manufactures a single product that it sells for $45 per unit. Provided below is information about this product for the past six months: Month Units Sold Total Cost Incurred March 5,390 $173,190 April 7,040 $211,360 May 6,670 $204,220 June 8,610 $250,470 July 5,540 $175,930 August 7,960 $233,040 Calculate the number of units that would need to be sold in September in order for the degree of operating leverage for September to be equal to 1.40.
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