Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

United Snack Company sells 60-pound bags of peanuts to university dormitories for $34 a bag. The fixed costs of this operation are $307,840, while the

United Snack Company sells 60-pound bags of peanuts to university dormitories for $34 a bag. The fixed costs of this operation are $307,840, while the variable costs of peanuts are $0.22 per pound.

image text in transcribed

image text in transcribedimage text in transcribed

United Snack Company sells 60-pound bags of peanuts to university dormitories for $34 a bag. The fixed costs of this operation are $307,840, while the variable costs of peanuts are $0.22 per pound. a. What is the break-even point in bags? Break-even point 14,800 bags ..... b. Calculate the profit or loss (EBIT) on 8,000 bags and on 21,000 bags. Profit/Loss Amount Bags 8,000 21,000 c. What is the degree of operating leverage at 20,000 bags and at 25,000 bags? (Round your answers to 2 decimal places.) Bags Degree of Operating Leverage 20,000 25,000 d. If United Snack Company has an annual interest expense of $22,000, calculate the degree of financial leverage at both 20,000 and 25,000 bags. (Round your answers to 2 decimal places.) Bags Degree of Financial Leverage 20,000 25,000 e. What is the degree of combined leverage at both a sales level of 20,000 bags and 25,000 bags? (Round your answers to 2 decimal places.) Bags Degree of Combined Leverage 20,000 25,000

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

More Books

Students also viewed these Finance questions

Question

Discuss the techniques of job analysis.

Answered: 1 week ago

Question

How do we do subnetting in IPv6?Explain with a suitable example.

Answered: 1 week ago

Question

Explain the guideline for job description.

Answered: 1 week ago

Question

What is job description ? State the uses of job description.

Answered: 1 week ago

Question

What are the objectives of job evaluation ?

Answered: 1 week ago