Healthy Foods Incorporated sells 60-pound bags of grapes to the military for $15 a bag. The fixed costs of this operation are $90,000,while the variable costs of grapes are $0.15 per pound.a. What is the break-even point in bags?Note: Round your answer to 2 decimal places.Break-even pointb. Calculate the profit or loss (EBIT) on 11,000 bags and on 32,000 bags.Bags11,00032,000Bags19,00032,000c. What is the degree of operatingerage at 19,000 bags and at 32,000 bags?Note: Round your answers to 2 decimal places.Bags19,00032,000Profit/Lossd. If Healthy Foods has an annual interest expense of $14,000, calculate the degree of financial leverage at both 19,000 and 32,000bags.Note: Round your answers to 2 decimal places.BagsDegree of OperatingLeverage19,00032.00015,000.00 bagsDegree of FinancialLeverageAmounte. What is the degree of combined leverage at both 19,000 and 32,000 bags?Note: Round your answers to 2 decimal places.Degree of CombinedLeverage

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Healthy Foods Incorporated sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $80,000. while the variable costs of grapes are $0.10 per pound. a. What is the break-even point in bags? Note: Round your answer to 2 decimal places. Break-even point b. Calculate the profit or loss (EBIT) on 13,000 bags and on 35,000 bags. Bags 13,000 35,000 Bags 21,000 35,000 c. What is the degree of operating leverage at 21,000 bags and at 35,000 bags? Note: Round your answers to 2 decimal places. Profit/Loss Bags 21,000 35,000 bags Degree of Operating Leverage d. If Healthy Foods has an annual interest expense of $6,000, calculate the degree of financial leverage at both 21,000 and 35.000 bags. Note: Round your answers to 2 decimal places. Amount Degree of Financial Leverage
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1. University Catering sells 50 pound bags of popcorn in the university dormitories for P10 abag. Fixed cost of this operation are P80,000 while variable costs of the popcorn are P.10per pound.a. What is the BEP in bags?b. Calculate the EBIT or loss on 12,000 bags and 25,000 bags.c. Calculate the EBIT or loss on 25,000 bags.

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