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1. i) Calculate the accounting Break-Even Point for the company.

ii) In this case, it is easy to check if your Break Even Point answer is approximately correct. Explain why this is true.

2. i) Calculate the Degree of Operating Leverage for the Big Rock Brewery Inc.

ii) Usually there are 2 formulas that can be used to calculate DoL. In this case, only one formula can be used. Why?

iii) Search the internet for a recent DoL figure for Starbucks, another food and beverage company.

iv) How does Big Rocks DoL compare to that of Starbucks?

v) What does the comparison in part iv) above tell you about Big Rock?

VIU NUEN UNEYTENI II. Consolidated Statements of Comprehensive Income (In thousands of Canadian dollars, except per share amounts) Year ended December 30 Note 2018 2017 S $ Revenue Net revenue Cost of sales Gross profit 5 48,748 27,936 20,812 46,573 27,676 18,897 6 7 Expenses Selling expenses General and administrative Depreciation and amortization Operating expenses Operating income (loss) 13,562 5,795 524 14,290 5,174 470 19,881 931 19,934 (1,037) 8 327 18 333 2 622 (1,368) Finance expenses Other Income (Loss) before income taxes Income tax expense (recovery) Current Deferred 9 (71) 333 262 (175) (173) (348) (1,020) Net income (loss) and comprehensive income (loss) $ 360 $ VIU NUEN UNEYTENI II. Consolidated Statements of Comprehensive Income (In thousands of Canadian dollars, except per share amounts) Year ended December 30 Note 2018 2017 S $ Revenue Net revenue Cost of sales Gross profit 5 48,748 27,936 20,812 46,573 27,676 18,897 6 7 Expenses Selling expenses General and administrative Depreciation and amortization Operating expenses Operating income (loss) 13,562 5,795 524 14,290 5,174 470 19,881 931 19,934 (1,037) 8 327 18 333 2 622 (1,368) Finance expenses Other Income (Loss) before income taxes Income tax expense (recovery) Current Deferred 9 (71) 333 262 (175) (173) (348) (1,020) Net income (loss) and comprehensive income (loss) $ 360 $

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