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Question
Stromburg Corporation makes surveillance equipment for intelligence organizations. Its sales are $75,000,000. Fixed operating costs, including research and development, are $40,000,000, while variable costs amount to 30% of sales. Stromburg plans an expansion which will generate additional fixed costs of $15,000,000, decrease variable costs to 25% of sales, and also permit sales to increase to $100,000,000. What is Stromburg's DOL at the new projected sales level?
a. 3.75
b. 4.20
c. 3.50
d. 4.67
e. 3.33
Answer
This answer is hidden. It contains 203 characters.
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