What is the degree of operating leverage

Assignment Help Financial Management
Reference no: EM131842374

United Snack Company sells 40-pound bags of peanuts to university dormitories for $30 a bag. The fixed costs of this operation are $321,200, while the variable costs of peanuts are $0.20 per pound.

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

Break-Even Point _______ bags

b. Calculate the profit or loss (EBIT) on 10,000 bags and on 23,000 bags.

10,000____

23,000____

c. What is the degree of operating leverage at 18,000 bags and at 23,000 bags? (Round your answers to 2 decimal places.)

18,000____

23,000____

d. If United Snack Company has an annual interest expense of $20,000, calculate the degree of financial leverage at both 18,000 and 23,000 bags. (Round your answers to 2 decimal places.)

18,000____

23,000_____

e. What is the degree of combined leverage at both a sales level of 18,000 bags and 23,000 bags? (Round your answers to 2 decimal places.)

18,000____

23,000_____

Reference no: EM131842374

Questions Cloud

Debilitation and planning fit with free will : How does Morality, regret, debilitation and planning fit with free will.Basic writing
Briefly rehearse the basic gist of aristotle : Briefly rehearse the basic gist of Aristotle's "function argument," making sure to state its conclusion as well as the reasoning Aristotle gives to support it.
Is torture ever acceptable : Is torture ever acceptable? (This is an essay question of not less than 200). I need tips to on how to answer the question. It is a critical reasoning question.
Which inductive generalization is stronger : Our university's women's basketball team has won its last three games. Thus, it seems obvious that the team will repeat as champions this year.
What is the degree of operating leverage : What is the break-even point in bags? What is the degree of operating leverage at 18,000 bags and at 23,000 bags?
Why does the presence of an STI greatly increase the risk : Discuss why there is no typical STI patient. Why does the presence of an STI greatly increase the risk of HIV transmission?
Formulation of the categorical imperative : Briefly state the "humanity as an end in itself" formulation of the Categorical Imperative (also known as the "human dignity" or "intrinsic worth" formulation
Philosophical discussion of religion : What place do you think questions of religion hold in philosophical discussion? Do you see value in discussing religion philosophically? Why or why not?
Describe any of the experiences : Remember, do not describe any of the experiences, ideas, thoughts, or feelings that the self has, describe that self that has those experiences, ideas, thoughts

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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