Break-even point in bags

Assignment Help Accounting Basics
Reference no: EM13153348

Healthy Foods, Inc. sells 50-pound bags of grapes to the military for $18.00 a bag. The fixed costs of this operation are $135,000 while the variable costs of the popcorn are $0.18 per pound.

a. What is the break-even point in bags?

b. Calculate the profit or loss on 12,000 bags and on 25,000 bags.

c. What is the degree of operating leverage at 20,000 bags and at 25,000 bags? Why does the degree of operating leverage change as the quantity sold increases?

d. If Healthy Foods has an annual interest expense of $10,000, calculate the degree of financial leverage at both 20,000 and 25,000 bags.

e. What is the degree of combined leverage at both sales levels?

Reference no: EM13153348

Questions Cloud

Calculate molality of a normal creatinine level in blood : Creatine is a by-product of muscle metabolism, and creatinine levels in the body are known to be a fairly realiable indicator of kidney function.
Find the probability that five are tall and five are dwarf : The true proportion of tall peas (based on a 3:1 phenotypic ratio) is 3/4 or p = 0.75. What is the probability that 5 are tall and 5 are dwarf.
Invoice within the discount period : A retailer purchases merchandise with a catalog list price of $40,000. The retailer receives a 27% trade discount and credit terms of 2/10, n/30. How much cash will be needed to pay this invoice within the discount period?
Compute kb for methylamine : Calculate Kb for methylamine. Is methylamine strong base or weaker base than ammonia?
Break-even point in bags : What is the break-even point in bags? Calculate the profit or loss on 12,000 bags and on 25,000 bags. What is the degree of operating leverage at 20,000 bags and at 25,000 bags? Why does the degree of operating leverage change as the quantity sold ..
Explain how two individuals both affected : Explain How 2 Individuals Both Affected With Different Recessive Disorders That Block The Same Pathway Can Have Normal Children?
Explain the corresponding fact about conditional expectation : The latter is a random variable (any function of a random variable is a random variable). So what"s the corresponding fact about conditional expectation?
How many chromosomes will each resulting cell contain : If one cell in a dog (2n=78) undergoes meiosis and another cell undergoes mitosis, how many chromosomes will each resulting cell contain?
Purpose of the chart of accounts : What is the purpose of the chart of accounts? Why are internal controls and audit trails important in a computerized accounting system?

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  What is the total conversion cost

In the manufacture of 10,000 units of a product, direct materials cost incurred was $145,800, direct labor cost incurred was $82,000, and applied factory overhead was $45,500. What is the total conversion cost?

  What is the maximum amount of foreign tax credit

what is the maximum amount of foreign tax credit that a company will be allowed to take with respect to the income earned by a foreign operation?

  Accounting for nonprofit versus for-profit expenditures

Assume a nonprofit has a restricted fund for capital asset purchases. Compare the journal entries for the cash purchase of a $10,000 computer by the nonprofit, to how the journal entry would look for this for-profit.

  Behavior relating to the cost information

Is Margaret's behavior regarding the cost information she provided to Susan unethical? Explain your answer.

  Finished-goods inventory cost

What would be Altoona's finished-goods inventory cost on Dec 31 under the variable costing method?

  Simple rate of return on the investment problem

By automating the process, the company would save $108,000 per year in cash operating costs. The simple rate of return on the investment is closest to:

  Problem regarding investor in common stock

An investor in common stock received dividends in excess of the investor's share of investee's subsequent to the date of the investment. How will the investor's investment account be affected by those dividends under each of the following accounti..

  Depreciation for annual adjustment purposes

Which extended the useful life of the truck for an additional two years beyond that originally estimated (salvage value is still estimated at $24,000). In computing depreciation for annual adjustment purposes, expense is calculated for each month ..

  Collectability of outstanding loan

Oatly is concerned about the collectability of outstanding loan and whether the trucks still exist. He thus engages Susan Virms, CPA, to count the trucks, using registration information held by Oatly.

  What is the target cost

Ports Pans is considering the production of a new line of pottery. Based on preliminary market research, management has decided that each pot should be priced at $60. Furthermore, management believes that the profit margin should be 40 percent of ..

  Determining the tax consequences

Josephine is considering taking a 6-month rotation in Paris for her job. Which type of authority may be especially helpful in determining the tax consequences of Josephine's job in Paris?

  Actual rate of inflation

You have gone to the bank to borrow money for one year. The nominal rate is 7.5%. The real rate of interest is 4%. Over the course of the year, overall prices increased by 4%. This rate of inflation hurt the _____ because the actual rate of inflat..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd