Healthy Foods Incorporated sells 50-pound bags of grapes to the military for $10 a bag. The...

Transcribed Image Text:

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. Answer is complete and correct. Break-even point 16,000.00 bags b. Calculate the profit or loss (EBIT) on 13,000 bags and on 35,000 bags. Answer is complete and correct. Bags 13,000 Profit/Loss Amount Loss $ 15,000 35,000 Profit $ 95,000 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. Bags Degree of Operating Leverage 21,000 35,000 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. Bags 21,000 35,000 Degree of Financial Leverage e. What is the degree of combined leverage at both 21,000 and 35,000 bags? Note: Round your answers to 2 decimal places. Degree of Combined Bags 21,000 35,000 Leverage 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. Answer is complete and correct. Break-even point 16,000.00 bags b. Calculate the profit or loss (EBIT) on 13,000 bags and on 35,000 bags. Answer is complete and correct. Bags 13,000 Profit/Loss Amount Loss $ 15,000 35,000 Profit $ 95,000 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. Bags Degree of Operating Leverage 21,000 35,000 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. Bags 21,000 35,000 Degree of Financial Leverage e. What is the degree of combined leverage at both 21,000 and 35,000 bags? Note: Round your answers to 2 decimal places. Degree of Combined Bags 21,000 35,000 Leverage