12BP_b Healthy Foods Inc. sells 50-poun... [FREE SOLUTION]

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Foundations Of Financial Management

Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen

Business Studies

16th Edition 路 768 pages

ISBN: 9781259277160

Chapter 2: 12BP_b (page 147)

Healthy Foods Inc. sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $80,000, while the variable costs of grapes are $0.10 per pound.
b. Calculate the profit or loss on 12,000 bags and on 25,000 bags.

Short Answer

Expert verified

A loss of $20,000 is incurred by the company on selling 12,000 bags, whereas, a profit of $45,000 is earned by the company on selling 25,000 bags.

Step by step solution

Profit or loss on 12,000 bags

$\begin{array}{rcl} Profit / (Loss) & = & (Quantity 脳 (Price per unit - Variable cost per unit)) - Fixed cost \\ = & (12, 000 脳 ($ 10 - $ 5)) - $ 80, 000 \\ = & ($ 20, 000) \end{array}$

Profit or loss on 25,000 bags

$\begin{array}{rcl} Profit / (Loss) & = & (Quantity 脳 (Price per unit - Variable cost per unit)) - Fixed cost \\ = & (25, 000 脳 ($ 10 - $ 5)) - $ 80, 000 \\ = & $ 45, 000 \end{array}$

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Increase in accounts receivable	Decrease in prepaid expenses
Increase in notes payable	Increase in inventory
Depreciation expense	Dividend payment
Increase in investment	Increase in accrued expenses
Decrease in account payable

Stud Clothier
Balance sheet 20X1
Assets		Liabilities and Equity
Cash	\)60,000	Account payable	\(220,000
Account receivable	240,000	Accrued taxes	30,000
Inventory	350,000	Bonds payable (long term)	150,000
Plant and equipment	410,000	Common stock	80,000
		Paid in capital	200,000
		Retained earnings	380,000
Total assets	\)1,060,000	Total LIbilities and Equity	$1,060,000

91影视

Healthy Foods Inc. sells 50-pound bags of grapes to the military for \(10 a bag. The fixed costs of this operation are \)80,000, while the variable costs of grapes are $0.10 per pound.
b. Calculate the profit or loss on 12,000 bags and on 25,000 bags.

Short Answer

Step by step solution

Profit or loss on 12,000 bags

Profit or loss on 25,000 bags

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Most popular questions from this chapter

Recommended explanations on Business Studies Textbooks

Managers

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Organizational Behavior

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Financial Performance

Study anywhere. Anytime. Across all devices.

91影视

Healthy Foods Inc. sells 50-pound bags of grapes to the military for \(10 a bag. The fixed costs of this operation are \)80,000, while the variable costs of grapes are $0.10 per pound.b. Calculate the profit or loss on 12,000 bags and on 25,000 bags.

Short Answer

Step by step solution

Profit or loss on 12,000 bags

Profit or loss on 25,000 bags

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Business Studies Textbooks

Managers

Strategy

Organizational Behavior

Intermediate Accounting

Influences On Business

Financial Performance

Study anywhere. Anytime. Across all devices.

Healthy Foods Inc. sells 50-pound bags of grapes to the military for \(10 a bag. The fixed costs of this operation are \)80,000, while the variable costs of grapes are $0.10 per pound.
b. Calculate the profit or loss on 12,000 bags and on 25,000 bags.