you own a small manufacturing business that produces widgets. you have spent $150,000 acquiring the fixed assets you need to produce widgets. each widget costs you $2 to make and they sell for $15 each, so your variable cost is 13.3% of the overall revenue. at your current level of operating leverage, how many widgets must you sell to break even? 13,482 19,950 11,539 10,000

A cost-accounting technique called operational leverage assesses how much a company or project can raise operating profitability by raising revenue. High operating leverage companies have low variable costs and high gross margins when generating revenue.

You must finish the operational leverage calculation to determine the price at which to make a profit and pay your expenses. Additionally, it can assist you in comprehending the efficiency with which your company can generate profits by making use of fixed-cost assets like machinery or storage facilities.

Calculation:

Due to this:

$150,00 for fixed assets

Sales price = $15 Variable cost = $2

The contribution margin minus fixed costs equals the break-even point.

Sales per unit less variable cost per unit ($15-$2=$13) equals contribution margin.

Break-even point (Sales) is $150,000 divided by $13 to equal 11,539 units.

Therefore, in order to break even, 11,539 widgets must be sold.

Learn more about operating leverage with the help of the given link:

brainly.com/question/28192010

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