Question

Healthy Food Inc sells a 50 pound bag of grapes to the military for $25 a bag. The fixed cost of the operation is

95,000 while the variable cost of the grapes are .25 a pound.

A- What is the break-even point in bags?

B- Calculate the profit loss (EBIT) on 10,000 bags and 31,000 bags

Profit/Loss and amount for each.

C- What is the degree of operating leverage at 22,000 bags and 31,000 (Round answers 2 decimal places)

D- If healthy foods has annual interest expense at 8,000, calculate the degree of financial leverage at both 22,000 and 31,000 bags (Round answer 2 decimal places)

E-What is the degree of combined  leverage at both 22,000 and 31,000 bags (Round answers 2 decimal places)

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