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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:
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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