Question

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Mo's Delicious Burgers Inc. sells food to university cafeterias for $47 a box. The fixed costs of this operation are $275,100, while the variable cost per box is $26. a. What is the break-even point in boxes? (Do not round intermediate calculations.) Break-even point boxes b. Calculate the profit or loss on 11,000 boxes and 22,000 boxes. (Do not round intermediate calculations. Input all answers as positive values.) Amount Boxes 11,000 22,000 Profit/Loss (Click to select) (Click to select) C-1. What is the DOL at 15,400 boxes and 26,000 boxes? (Round the final answers to 2 decimal places.) Boxes 15,400 26,000 c-2. Not available in Connect. d. If the firm has an annual interest payment of $11,600, calculate the DFL at both 15,400 and 26,000 boxes. (Round the final answers to 2 decimal places.) DEL Boxes 15,400 26,000 e. What is the DCL at both sales levels? (Round the final answers to 2 decimal places.) DCL Boxes 15,400 26,000

Answer 1

Answer Giren Selling Prise Fixed cost Variable cost $ 47 per box $ 235100 & 26 per box. 19. Breek-Ever Point Break-even point is the situation where company is in posjeta_of_no profit or no less Breah - even point : fixed costs Contribution per unit وز) دارو $ 275100 $ (47-26) per 4m/t Break-Even point _1100_boxes. oftk 68 loss on - Profit / Loss 1000 - boxes and 22000 boxes Sales - Tobyl cost. 1 Profijt /1055 of 11000 beses = {(11000 boxes x (47-25) - 2751001 Loss 07_11000 boxes. : - 44000 Profit laws 09_22000 boxes -{ [ 12000 boxes x (47-26)] - 275100} - Profit en 2.000 boxes - $ 186900 Degree_of_Operqhing leverage cool) Degree of Operquing Leverage snel) is the percentage; change 14_Eggings Before in luesk and Fix (EBIT) with nect to percentage change in saler quantity It is ale calulated by Genbribyblon divided by. EkzT

% change 19 EBIT % change in Sales LancamDegree of Operating -Lesenge (001). HOR Degate of Operabia Leverage COULD DOL at 15400 boxer Gobllyton EBIT 15400 boxes X $ (47-26) { 05400 boxes X *(47-26)] – 275100} 223400 48900 : 6.69 DOL at 1000 boxer 26000 boxes x (47-26) {[26000 boxes X (47-26)]-2751003 200 Id. If firm har gogugl interest of 11600, DFL at 15400 and 26000 hores - Decree of operating leverage is the ratio of percentage change in Earnings before Top duided by percentage change in earnays before interest ant tyxes. It is also caleflated by Earning before interest ant byxes Sjuises by Earnings - Setors. Take Degree of Ejagnc1. % change in Eginings befove tox Leverage COFL) % uglje 11 6919.ays before M _12/ [AŁ

Deyvee of financial Lyxnings before interest and TX TE Levesque COLT Eqrnings before Tax DEL PE..15.400 boxes and 20000 boxes is as follows.com showlag._19come_stalemeglia 115400 boxes 26000 boxes sales 723800 12.22000 - Vouble corte (400400)| (676000) - Contribution Magligt 323400 546000 -: fixed cost (275100 (275700) L.Eannings Before Inlevest 6 Tax! _48300 27ogoo Interest (11600) (11600 -Eqxnings Before Tax_ 36700 Draw 36700 2.59 300 . : OFL at 15400 boxes : s 1.31 48300 16700 - = 1.04 DFL at 26000 boxes = 270900 259300 e Oldt 15400 901_26000 boxen Degree of combined Leverage is Eglullated by degree of operating tewerage multiplied by degree of financial leverest Degree of combined = begree of Operating X Degree of - leverage (Acl leverge cool Financial levege oha DEL no + 15400 boxes : 6.69 X 131 : 8.8|| at 26000 boxes > 2.01 X .04 - 2.10

. The growers que Arq. Break - Even_point_14_boxes 13100 boxes 6. Profit on 22000 boxes Loss on_11000 boxes $ $ 186900 - 44100 C. Degree of operating_leverage E isgow boxes - 26000 boxes = 669 x 2.01 di Degree_of_f194949) Leverage c 15300 boxes - List 26000 6*Xe5 → 1.04 e Degree of Com bind leverage < 15400 boxes 8.81 - 26060 boxca 2:10