### Break Even Analysis In Tutorial Library

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### TITLE: Break Even Analysis

#### CLASS / COURSE: FIN200

QUESTION DESCRIPTION:

Week 4 - Break-Even Analysis Chapter 5

Healthy Foods Inc.

Product 45 lbs bags
Price \$10.00 Per bag
Fixed Costs \$75,000
Variable Costs \$0.10 Per lbs
Annual Interest Exp \$10,000

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

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

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

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

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

SOLUTION DESCRIPTION: Completed Solution is attached. Click on Buy button and then download file to get full solution.

SUBJECTS / CATEGORIES:
1. Finance
2. Financial Management
3. Accounting
4. Corporate Finance
5. Business and Finance Case Studies

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