Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Healthy Foods Inc. sells 50-pound bags of grapes to the military for $16 a bag. The fixed costs of this operation are $90,000, while the

image text in transcribedimage text in transcribed

Healthy Foods Inc. sells 50-pound bags of grapes to the military for $16 a bag. The fixed costs of this operation are $90,000, while the variable costs of grapes are $0.20 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 12,000 bags and on 34,000 bags. c. What is the degree of operating leverage at 20,000 bags and at 34,000 bags? (Round your answers to 2 decimal places.) d. If Healthy Foods has an annual interest expense of $13,000, calculate the degree of financial leverage at both 20,000 and 34,00 bags. (Round your answers to 2 decimal places.) e. What is the degree of combined leverage at both 20,000 and 34,000 bags? (Round your answers to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance In A Gig Economy Strategies For Modern Workers

Authors: Julian Graham

1st Edition

B0CFD1RZM4, 979-8857574812

More Books

Students also viewed these Finance questions

Question

Social and Cognitive Processes of Interpersonal Communications

Answered: 1 week ago