What is the break-even point in bags

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Reference no: EM131841007

United Snack Company sells 40-pound bags of peanuts to university dormitories for $30 a bag. The fixed costs of this operation are $321,200, while the variable costs of peanuts are $0.20 per pound.

a. What is the break-even point in bags?

b. Calculate the profit or loss (EBIT) on 10,000 bags and on 23,000 bags.

10,000 ____

23,000_____

c. What is the degree of operating leverage at 18,000 bags and at 23,000 bags? (Round your answers to 2 decimal places.)

18,000 ____

23,000____

d. If United Snack Company has an annual interest expense of $20,000, calculate the degree of financial leverage at both 18,000 and 23,000 bags. (Round your answers to 2 decimal places.)

18,000 _____

23,000______

e. What is the degree of combined leverage at both a sales level of 18,000 bags and 23,000 bags? (Round your answers to 2 decimal places.)

18,000 ____

23,000 _____

Reference no: EM131841007

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