Final answer:
The accounting break-even point for the project is approximately 7532 units. The degree of operating leverage at the accounting break-even point is 1.33.
Step-by-step explanation:
For the accounting break-even point, we need to calculate the total costs and find the sales volume at which the total cost equals the total revenue. The fixed costs per year are $100,000. Variable costs per unit can be calculated as the difference between the price per unit ($23.80) and variable cost per unit ($10.52), which is $13.28. The accounting break-even point can be calculated by dividing the fixed costs by the contribution margin per unit.
The contribution margin per unit is $13.28, so the accounting break-even point can be calculated as follows:
Accounting break-even point = Fixed Costs / Contribution Margin per Unit = $100,000 / $13.28 = 7531.33
Therefore, the accounting break-even point is approximately 7532 units.
Now, let's calculate the degree of operating leverage at the accounting break-even point. The degree of operating leverage measures the change in operating profit resulting from a change in sales volume. It can be calculated by dividing the contribution margin by the operating profit.
Operating profit = Sales Revenue - Total Variable Costs - Total Fixed Costs = ($23.80 * 7,532) - [($10.52 * 7,532) + $100,000] = $178, 845.20 - $103, 792.64 = $75,052.56
Contribution margin = Sales Revenue - Total Variable Costs = ($23.80 * 7,532) - ($10.52 * 7,532) = $178, 845.20 - $79,285.44 = $99,559.76
Therefore, the degree of operating leverage at the accounting break-even point is:
Degree of operating leverage = Contribution Margin / Operating Profit = $99,559.76 / $75,052.56 = 1.33