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(Solved) United Snack Company sells 40-pound bags of peanuts to university dormitories for $18 a bag. The fixed costs of this operation are $173,600, while...


United Snack Company sells 40-pound bags of peanuts to university dormitories for $18 a bag. The fixed costs of this operation are $173,600, while the variable costs of peanuts are $.14 per pound.

  
 

a.

 What is the break-even point in bags? (Round your answer to the nearest whole number.)

  
 

  Break-even point bags  
b.

Calculate the profit or loss (EBIT) on 8,000 bags and on 21,000 bags. (Input all amounts as positive values. Round your answers to the nearest whole number.)

  
 

Bags Profit/Loss Amount
8,000         (Click to select)LossProfit  $  
21,000         (Click to select)ProfitLoss  $  

   
 

c.

What is the degree of operating leverage at 20,000 bags and at 25,000 bags? (Round your answers to 2 decimal places.)

Bags Degree of
Operating Leverage
20,000         
25,000         

  
 

d.

If United Snack Company has an annual interest expense of $14,000, calculate the degree of financial leverage at both 20,000 and 25,000 bags. (Round your answers to 2 decimal places.)

  
 

Bags Degree of
Financial Leverage
20,000         
25,000         
e.

What is the degree of combined leverage at both a sales level of 20,000 bags and 25,000 bags? (Round your answers to 2 decimal places.)

Bags Degree of
Combined Leverage
20,000         
25,000       


 


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