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United Snack Company sells 50-pound bags of peanuts to university dormitories for $44 a bag. The fixed costs of this operation are $381,250, while the variable costs of peanuts are $0.27 per pound. What is the break-even point in bags? Calculate the profit or loss (EBIT) on 11,000 bags and on 24,000 bags. What is the degree of operating leverage at 19,000 bags and at 24,000 bags? Note: Round your answers to 2 decimal places.

United Snack Company sells 50-pound bags of peanuts to university dormitories for $44 a bag. The fixed costs of this operation are $381,250, while the variable costs of peanuts are $0.27 per pound. What is the break-even point in bags? Calculate the profit or loss (EBIT) on 11,000 bags and on 24,000 bags. What is the degree of operating leverage at 19,000 bags and at 24,000 bags? Note: Round your answers to 2 decimal places.

Cornerstones of Cost Management (Cornerstones Series)
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 9E: Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs...
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United Snack Company sells 50-pound bags of peanuts to university dormitories for $44 a bag. The fixed costs of this operation are $381,250, while the variable costs of peanuts are $0.27 per pound.

  1. What is the break-even point in bags?
  1. Calculate the profit or loss (EBIT) on 11,000 bags and on 24,000 bags.
  1. What is the degree of operating leverage at 19,000 bags and at 24,000 bags?

Note: Round your answers to 2 decimal places.

  1. If United Snack Company has an annual interest expense of $27,000, calculate the degree of financial leverage at both 19,000 and 24,000 bags.

Note: Round your answers to 2 decimal places.

  1. What is the degree of combined leverage at both a sales level of 19,000 bags and 24,000 bags?

Note: Round your answers to 2 decimal places.

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