FIN 200 wk 4break even analysis checkpoint

Apr 18th, 2015
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Course: Business and Management
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5-13.Solution:3 pt. eachHealthy Foods, Inc.a.b.12,000 bags25,000 bagsSales @ $10 per bag$120,000$250,000Less: Variables Costs ($5) (60,000) (125,000) Fixed Costs (80,000) (80,000)Profit or Loss($ 20,000)$ 45,000c.Leverage goes down because we are further away from the break-even point, thus the firm is operating on a larger profit base and leverage is reduced.5-13. (Continued)d.First determine the profit or loss (EBIT) at 20,000 bags. As indicated in part b, the profit (EBIT) at 25,000 bags is$45,000:20,000 bagsSales @ $10 per bag$200,000

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