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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.
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 25,000Step by Step Solution
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