Cost Structure Implications to an Organiz.-high FC or high VC

Cost Structure Implications to an Organiz.-high FC or high VC

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Cost Structure Implications to an Organization Company X Company Y Total Per Unit Total Per Unit Sales $100,000 $10 Sales $100,000 $10 -Var. Costs - 20,000 - 2 -Var. Costs - 70,000 - 7 Cont. Margin $ 80,000 $ 8 Cont. Margin $ 30,000 $ 3 -Fix. Costs - 70,000 - 7 -Fix. Costs - 20,000 - 2 Oper. Income $ 10,000
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Unformatted text preview: $ 1 Oper. Income $ 10,000 $ 1 Breakeven Point = 8,750 units Breakeven Point = 6,667 units Wide swings in profit Moderate swings in profit Degree of Operating Leverage = 8 Degree of Operating Leverage = 3 Structure for a Risk Taker Structure for a Risk Averse...
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