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What is the break-even point in bags

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Healthy Foods Inc. sells 50-pound bags of grapes to the military for $20 a bag. The fixed costs of this operation are $100,000, while the variable costs of grapes are $0.25 per pound.

a. What is the break-even point in bags? (Round your answer to 2 decimal places.)

b. Calculate the profit or loss (EBIT) on 14,000 bags and on 29,000 bags.

Bags Profit/Loss amount

14000

29000

What is the degree of operating leverage at 22,000 bags and at 29,000 bags? (Round your answers to 2 decimal places.)

Bags Degree of operating leverage

22000

29000

d. If Healthy Foods has an annual interest expense of $8,000, calculate the degree of financial leverage at both 22,000 and 29,000 bags. (Round your answers to 2 decimal places.)

Bags Degree of financial leverage

22000

29000

e. What is the degree of combined leverage at both 22,000 and 29,000 bags? (Round your answers to 2 decimal places.)

Bags Degree of combined leverage

22000

29000

Reference no: EM132484194

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