Healthy Foods, Inc., sells 50-pound bags of grapes to the military for $10 a bag. What is the degree of combined leverage at both sales levels? Chapter 5 page 144 problem 13 in Foundations of Financial Management.
This is what I have so far can you tell me if this is correct?
For 20,000 bags: You take the DOL, which is 5, and the DFL, which is 2, 5x2 = 10
For 25,000 bags: You take the DOL 2.78 x the DFL 1.29 = 3.57
Degree of combined leverage = DOL x DFL = 3.57
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