Break$-$even point and degree of leverage $($LO$2$ and $5)$ United Snack Company sells

$50-$pound bags of peanuts to university dormitories for $$20$a bag. The fixed costs of

this operation are $$176,250,$ while the variable costs of peanuts are $$\mathrm{.}15$ per pound.

a$.$ What is the break$-$even point in bags?

b$.$ Calculate the profit or loss on $7,000$ bags and on $20,000$ bags.

c$.$ What is the degree of operating leverage at $19,000$ bags and at $24,000$ bags? Why

does the degree of operating leverage change as the quantity sold increases?

d$.$ If United Snack Company has an annual interest expense of $$15,000,$ calculate the

degree of financial leverage at both $19,000$ and $24,000$ bags.

$e.$ What is the degree of combined leverage at both sales levels