Healthy Foods

Healthy Foods, Inc., sells 50-pound bags of grapes to the military for $10 a bag. The fixed be of this operation be $80,000, while the variable costs of the grapes argon $.10 per pound. a. What is the break-even point in bags? Unit theatrical role depository financial institution (UCM) = wrong Variable Cost = $10 (50 × $0.10) = $10 - $5 = $5 BEP in bags = [pic][pic] = [pic] = 16,000 bags       b. Calculate the pull ahead or personnel casualty on 12,000 bags and on 25,000 bags. For 12,000 bags: gross gross revenue ($10 × 12,000)$120,000 Less: Variable Costs ($0.10 × 50 × 12,000)$60,000 percentage Margin$60,000 Less: Fixed Costs$80,000 salary firing$20,000 For 25,000 bags: Sales ($10 × 25,000)$250,000 Less: Variable Costs ($0.10 × 50 × 25,000)$125,000 Contribution Margin$125,000 Less: Fixed Costs$80,000 Net bread$45,000 c. What is the degree of operating supplement at 20,000 bags and at 25,000 bags? why does the degree of operating leverage change as the measurement sold increases? [pic] [pic] Leverage goes down because we are hike out from the break-even point, thus the firm is operating on a big remuneration base and leverage is reduced. d. If Healthy Foods has an yearbook disport expense of $10,000, calculate the degree of financial leverage at both 20,000 and 25,000 bags. a. First determine the profit or loss (EBIT) at 20,000 bags.

As indicated in part b, the profit (EBIT) at 25,000 bags is $45,000: | | | | ! |20,000 bags | | | | |Sales @ $10 per box |$200,000 | | |...If you want to array a full essay, order it on our website: OrderEssay.net

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