Question: United Snack Company sells 50-pound bags of peanuts to university dormitories for $20 a bag. The fixed costs of this operation are $176,250, while the variable costs of peanuts are $.15 per pound. If United Snack Company has an annual interest expense of $15,000, calculate the degree of financial leverage at both 19,000 and 24,000 bags. (Round your answers to 2 decimal places.) What is the degree of combined leverage at both a sales level of 19,000 bags and 24,000 bags? (Round your answers to 2 decimal places.)
Question: United Snack Company sells 50-pound bags of peanuts to university dormitories for $20 a bag. The fixed costs of this operation are $176,250, while the variable costs of peanuts are $.15 per pound. If United Snack Company has an annual interest expense of $15,000, calculate the degree of financial leverage at both 19,000 and 24,000 bags. (Round your answers to 2 decimal places.) What is the degree of combined leverage at both a sales level of 19,000 bags and 24,000 bags? (Round your answers to 2 decimal places.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 16E
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![Question:
United Snack Company sells 50-pound bags of
peanuts to university dormitories for $20 a bag.
The fixed costs of this operation are $176,250,
while the variable costs of peanuts are $.15 per
pound. If United Snack Company has an annual
interest expense of $15,000, calculate the degree
of financial leverage at both 19,000 and 24,000
bags. (Round your answers to 2 decimal places.)
What is the degree of combined leverage at both
a sales level of 19,000 bags and 24,000 bags?
(Round your answers to 2 decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb97d46dc-2fc2-4aa8-9c77-67226ce79920%2F8ba96db6-cc58-48f8-aa19-6e6d0911fae9%2Fhtc6yx3o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question:
United Snack Company sells 50-pound bags of
peanuts to university dormitories for $20 a bag.
The fixed costs of this operation are $176,250,
while the variable costs of peanuts are $.15 per
pound. If United Snack Company has an annual
interest expense of $15,000, calculate the degree
of financial leverage at both 19,000 and 24,000
bags. (Round your answers to 2 decimal places.)
What is the degree of combined leverage at both
a sales level of 19,000 bags and 24,000 bags?
(Round your answers to 2 decimal places.)
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