Question
Mo & Chris's Delicious Burgers, Inc., sells food to Military Cafeterias for $29 a box. The fixed costs of this operation are $132,000, while the
Mo & Chris's Delicious Burgers, Inc., sells food to Military Cafeterias for $29 a box. The fixed costs of this operation are $132,000, while the variable cost per box is $17. |
(a) | What is the break-even point in boxes? |
Break-even point | boxes |
(b) | Calculate the profit or loss on 14,000 boxes and on 29,500 boxes. (Input all amounts as positive values. Omit the "$" sign in your response.) |
Boxes | Profit/Loss | Amount |
14,000 | (Click to select)LossProfit | $ |
29,500 | (Click to select)LossProfit | $ |
(c) | What is the degree of operating leverage at 13,000 boxes and at 29,500 boxes? (Enter only numeric value rounded to 2 decimal places.) |
Boxes | Degree of operating leverage | ||
13,000 | |||
29,500 | |||
(d) | If the firm has an annual interest expense of $10,700, calculate the degree of financial leverage at both 13,000 and 29,500 boxes.(Enter only numeric value rounded to 2 decimal places.) |
Boxes | Degree of financial leverage | ||
13,000 | |||
29,500 | |||
(e) | What is the degree of combined leverage at both sales levels? (Enter only numeric value rounded to 2 decimal places.) |
Boxes | Degree of combined leverage |
13,000 | |
29,500 |
Step 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