Posted by janay1978 on .
Healthy food Inc sells 50lb bags of grapes to the military for $10 a bag.
The fixed costs of this operation are $80,000 while the variable costs of the grapes are $10 per lb.
1. what us the break even point
2. what is the degree of combined leverage at both sales levels.
Math-FInance please help me -
2. What two sales levels are you refering to?
As for part 1, there must be s mistake somewhere. Is it $10 per lb (as you state) or $10 per bag? Or less? You will never make a profit selling 50lb bags for $10, if the variable cost is $10 per lb ($500 per bag).
Math-for drwls -
For question number 2 the teacher states operating leverage and financial leverage but that is it I am totally confused? Thanks for the help