13. Mila Lighting Company makes decorative lamps. The firm's income statement is as follows: Mila Lighting...
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13. Mila Lighting Company makes decorative lamps. The firm's income statement is as follows: Mila Lighting Company Sales (8,000 fans at $25) $200,000 Less: Variable Cost (8,000 lamps at $15) 120,000 Contribution Margin $80,000 Less: Fixed Costs 54,000 EBIT $26,000 Less: Interest Charges 10,000 EBT $16,000 Less: Taxes (20%) $3,200 NET INCOME $12,800 Compute: a. Degree of operating leverage. (DOL) b. Degree of financial leverage. (DFL) c. Breakeven point in units. (BEP) (15p) 13. Mila Lighting Company makes decorative lamps. The firm's income statement is as follows: Mila Lighting Company Sales (8,000 fans at $25) $200,000 Less: Variable Cost (8,000 lamps at $15) 120,000 Contribution Margin $80,000 Less: Fixed Costs 54,000 EBIT $26,000 Less: Interest Charges 10,000 EBT $16,000 Less: Taxes (20%) $3,200 NET INCOME $12,800 Compute: a. Degree of operating leverage. (DOL) b. Degree of financial leverage. (DFL) c. Breakeven point in units. (BEP) (15p)
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