15-5A. (Lroerage analysis) You have developed the following analytical income statement your corporation. It represents the most recent year's operations, which ended yesterday,

Your supervisor in the controller's office has just handed you a memorandum asking for written responses to the following questions:
a.ı At this level of output, what is the degree of operating leverage?

b. What is the degree of financial leverage?
c.ı What is the degree of combined leverage?

d. What is the firm's break-even point in sales dollars?
e.ı If sales should increase by 25 percent, by what percent would earnings before taxes (and net income) increase?

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Sales Variable costs Revenue before fixed costs $45,750,000 22,800,000 $22,950,000 9,200,000 Fixed costs EBIT Interest expense Earnings before taxes Taxes (.50) Net income $13,750,000 1,350,000 $12,400,000 6,200,000 $ 6,200,000