Healthy Foods Inc.

strong Foods Inc. 1 rosy Foods Inc. Robert Johnson FIN /200 - substructure To finance: Harvesting The Money Tree 8/12/2011 instructor: Joseph Lane Healthy Foods Inc. 2 Healthy Foods, Inc., sells 50-pound bags of grapes to the legions for $10 a bag. The stubborn cost of this operation be $80,000, while the variable costs of the grapes are $.10 per pound. a.What is the break-even point in bags? $80, 000 $80,000 BE = $10-$5 = $5 = 16,000 bags b.Calculate the profit or sack on 12,000 bags and on 25,000 bags.

Total Variable Fixed be Total be Total Revenue Operating Income Costs (TVC) (FC) (TC) (TR) (loss) (12,000 x $5) (12,000 x $10) $60,000 $80,000 $140,000 $120,000 ($20,000) (25,000 x $5) (25,000 x $10) $125,000 $80,000 $205,000 ! $250,000 $45,000 c. What is the degree of operational leverage at 20,000 bags and at 25,000 bags? Why does the degree of operating(a) leverage transmit as the quantity sold increases? 20,000($10 - $5) $100,000 trade union movement= 20,000($10-$5) - $80,000 = $20,000 = 5 25,000($10 - $5) $125,000 task = 25,000($10-$5)- $80,000 = $45,000 = 2.8 Because the father away you get from the breakeven point the smaller the percentages is sacking to be that is why 20,000 bags has a higher percentage than 25,000 bags. d. If Healthy Foods has an annual...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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