Healthy Foods Inc. sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $92,000, while the variable costs of grapes are $0.10 per pound. a. What is the break-even point in bags? (Round your answer to 2 decimal places.) Break-even point bags b. Calculate the profit or loss (EBIT) on 16,000 bags and on 34,000 bags. Bags Profit/Loss Amount 16,000 34,000 c. What is the degree of operating leverage at 26,000 bags and at 34,000 bags? (Round your answers to 2 decimal places.) Bags Degree of Operating Leverage 26,000 34,000
Healthy Foods Inc. sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $92,000, while the variable costs of grapes are $0.10 per pound.
a. What is the break-even point in bags? (Round your answer to 2 decimal places.)
| Break-even point | bags |
b. Calculate the profit or loss (EBIT) on 16,000 bags and on 34,000 bags.
| Bags | Profit/Loss | Amount |
| 16,000 | ||
| 34,000 |
c. What is the degree of operating leverage at 26,000 bags and at 34,000 bags? (Round your answers to 2 decimal places.)
| Bags | Degree of Operating Leverage |
| 26,000 | |
| 34,000 |
d. If Healthy Foods has an annual interest expense of $10,000, calculate the degree of financial leverage at both 26,000 and 34,000 bags. (Round your answers to 2 decimal places.)
| Bags | Degree of Financial Leverage |
| 26,000 | |
| 34,000 |
e. What is the degree of combined leverage at both 26,000 and 34,000 bags? (Round your answers to 2 decimal places.)
| Bags | Degree of Combined Leverage |
| 26,000 | |
| 34,000 |
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