Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for $17,000 and at that price, Thad estimates 700 units would be sold each year. The variable cost to produce and sell the cycles would be $13,600 per unit. The annual fixed cost would be $1,785,000.
(a) What is the break-even in unit sales?
(b) What is the margin of safety in dollars?
(c) What is the degree of operating leverage? (Round your answer to 2 decimal places.)
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