Question
Mo & Chris's Delicious Burgers, Inc., sells food to Military Cafeterias for $21 a box. The fixed costs of this operation are $104,000, while the
Mo & Chris's Delicious Burgers, Inc., sells food to Military Cafeterias for $21 a box. The fixed costs of this operation are $104,000, while the variable cost per box is $13. |
(a) | What is the break-even point in boxes? |
Break-even point | boxes |
(b) | Calculate the profit or loss on 12,000 boxes and on 27,000 boxes. (Input all amounts as positive values. Omit the "$" sign in your response.) |
Boxes | Profit/Loss | Amount |
12,000 | (Click to select)ProfitLoss | $ |
27,000 | (Click to select)LossProfit | $ |
(c) | What is the degree of operating leverage at 17,000 boxes and at 27,000 boxes? (Enter only numeric value rounded to 2 decimal places.) |
Boxes | Degree of operating leverage | ||
17,000 | |||
27,000 | |||
(d) | If the firm has an annual interest expense of $10,300, calculate the degree of financial leverage at both 17,000 and 27,000 boxes.(Enter only numeric value rounded to 2 decimal places.) |
Boxes | Degree of financial leverage | ||
17,000 | |||
27,000 | |||
(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 |
17,000 | |
27,000 | |
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