Problem 5-13 (Algo) Break-even point and degree of leverage [LO5-2,5-5]
United Snack Company sells 40-pound bags of peanuts to university dormitories for $24 a beg. The fixed costs of this operation are
$245.960, while the variable costs of peanuts are $0.17 per pound
a. What is the break-even point in bags?
Br-o part
. Cuiculate the profit or loss (EBIT) on 5.000 bags and on 19,000 begs.
PrUPELOCE
5,000
Amount
c. What is the degree of operating leverege at 17,000 ongs and at 22,000 baga?
Note: Round your answers to 2 decimal places.
Degree of Operating
Lovorage
17,000
22.000
d. United Snack Company has an annual interest expense of $17,000, calculate the degree of financial leverage at bom 12000
22.000 bags
Note: Round your answers to 2 decimal places.
17,000
e. What is the degree of comederage of 17,000 22,000 teg?
Note: Round your answers to 2 decimal places.