Following is the latest income statement for Surfside Airlines: Sales $150,000 Variable operating costs .. (105,000)
Question:
Following is the latest income statement for Surfside Airlines:
Sales ………………………………………………… $150,000
Variable operating costs ………………….. (105,000)
Gross profit …………………………........…… 45,000
Fixed operating costs ……………………… (20,000)
Net operating income …………………..… 25,000
Interest ……………………………..............… (15,000)
Earnings before taxes ......................... 10,000
Taxes (40%) …………………………......…… (4,000)
Net income …………………………….....….. $ 6,000
Compute Surfside’s degree of operating leverage (DOL), degree of financial leverage (DFL), and degree of total leverage (DTL).
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