Question
Healthy Foods Inc. sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $90,000, while the
Healthy Foods Inc. sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $90,000, while the variable costs of grapes are $0.10 per pound.
a. What is the break-even point in bags? (Round your answer to 2 decimal places.)
b. Calculate the profit or loss (EBIT) on 10,000 bags and on 30,000 bags. c. What is the degree of operating leverage at 23,000 bags and at 30,000 bags? (Round your answers to 2 decimal places.) d. If Healthy Foods has an annual interest expense of $9,000, calculate the degree of financial leverage at both 23,000 and 30,000 bags. (Round your answers to 2 decimal places.) e. What is the degree of combined leverage at both 23,000 and 30,000 bags? (Round your answers to 2 decimal places.)
Pwy yw variable costs of grapes are $0.10 per pound. a. What is the break-even point in bags? (Round your answer to 2 decimal places.) Break-even point bags b. Calculate the profit or loss (EBIT) on 10,000 bags and on 30,000 bags Bags Profit/Loss Amount 10.000 30,000 c. What is the degree of operating leverage at 23,000 bags and at 30,000 bags? (Round your answers to 2 decimal places.) Degree of Operating Leverage Bags 23.000 30,000 d. If Healthy Foods has an annual interest expense of $9,000, calculate the degree of financial leverage at both 23,000 and 30,000 bags (Round your answers to 2 decimal places.) Bags Degree of Financial Leverage 23,000 30,000 e. What is the degree of combined leverage at both 23,000 and 30,000 bags? (Round your answers to 2 decimal places.) Bags Degree of Combined Leverage 23,000 30,000Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started