Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Healthy Foods Inc. sells 60-pound bags of grapes to the military for $15 a bag. The fixed costs of this operation are $90,000, while the

image text in transcribedimage text in transcribed

Healthy Foods Inc. sells 60-pound bags of grapes to the military for $15 a bag. The fixed costs of this operation are $90,000, while the varlable costs of grapes are $0.15 per pound. a. What is the break-even point in bags? (Round your answer to 2 decimal places.) bags Break-even point b. Calculate the profit or loss (EBIT) on 14.000 bags and on 35,000 bags Bags Profit/Loss Amount 14,000 35,000 c. What is the degree of operating leverage at 21,000 bags and at 35,000 bags? (Round your answers to 2 decimal places.) Degree of Operating Leverage Bags 21,000 35,000 d. If Healthy Foods has an annual interest expense of $17,000, calculate the degree of financial leverage at both 21,000 and 35,000 bags. (Round your answers to 2 decimal places.) Degree of Financial Leverage Bags 21,000 35,000 e. What is the degree of combined leverage at both 21,000 and 35,000 bags? (Round your answers to 2 decimal places.) Degree of Combined Leverage Bags 21,000 35,000

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

The Complete FinOps Handbook Essential Tools And Techniques For Financial Operations

Authors: Peter Bates

1st Edition

1922435546, 978-1922435545

More Books

Students also viewed these Finance questions

Question

Evaluating Group Performance?

Answered: 1 week ago