university of southern california Operations And Supply Chain Management Assignment Help - Carolina Fastener

Question - Carolina Fastener, Inc., makes a patented marine bulkhead latch that wholesales for $6.00. Each
latch has variable operating costs of $3.50. Fixed operating costs are $50,000 per year. The firm pays
$13,000 interest and preferred dividends of $7,000 per year. At this point, the firm is selling 30,000
latches per year and is taxed at a rate of 40%.
a. Calculate Carolina Fastener’s operating breakeven point.
b. On the basis of the firm’s current sales of 30,000 units per year and its interest and preferred
dividend costs, calculate its EBIT and earnings available for common.
c. Calculate the firm’s degree of operating leverage (DOL).
d. Calculate the firm’s degree of financial leverage (DFL).
e. Calculate ...Read More the firm’s degree of total leverage (DTL).
f. Carolina Fastener has entered into a contract to produce and sell an additional 15,000 latches in the
coming year. Use the DOL, DFL, and DTL to predict and calculate the changes in EBIT and earnings
available for common. Check your work by a simple calculation of Carolina Fastener’s EBIT and
earnings available for common, using the basic information given. ...Read Less

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