Math-FInance please help me
posted by janay1978 .
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.
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).
For question number 2 the teacher states operating leverage and financial leverage but that is it I am totally confused? Thanks for the help