· 2. A recommendation for the optimal production level and an explanation of why that level maximizes profits

I was able to determine the level of production based on the the tab before P&L, and then recreated a new P&L based on a change of allocations, or restatement of both direct and indirect costs. Based on the revised sheets, what should be the new level of production for each product. It took approximately 10 hours to generate a solution. Need to check if I am on track.

A plan for how the company will respond to future changes in the keyboard market.

The goal is to support your conclusions with data, and explain the difference between the long run and the short run and how this distinction is important for X keyboard division, the conditions under which the company should exit the keyboard market and why,the conditions that determine the length of the short run for X's keyboard division and the conditions under which the company should shut down production and why. Any help on this subject, or some guidance to a solution would be helpful. Based on my notes, and my income statements, a solution is obtainable.

Calculate the Operating Leverage

I calculated the break-even points for three products - keyboard, software, soundcard - and I am confident my calculations are perfect. I need help with calculating the operating leverage for software and keyboard divisions, and need some help explaining the assumptions and calculations for each. The attached files gives a good overview of information, and my excel sheet is pretty good. Thanks for the help!

Growth in Profits - Degree of Operating Leverage?

If the sales of both software and deyboad divisions increase at the same rate, which will have the fastest growth in profits? I believe the key is derived by using DOL, or the degree of operating leverage. I am not sure how to apply this methodology to the sample data attached below.

Effect of Operating Leverage on Company's Risk Position

Describe how expanding the division with the highest operating leverage would affect the company's risk position. Based on the degree of operating leverage, how will this impact the risk?