17. As the financial manager for a manufacturing firm, you have constructed the following partial pro forma income statement for the next fiscal year.

Sales $15,700,000 Variable costs 7,600,000 Revenue before fixed costs 8,100,000 Fixed costs 4,500,000 EBIT 3,600,000 Interest expenses 1,400,000 Earnings before taxes 2,200,000 Taxes (40%) 880,000 Net income $1,320,000

a. What is the degree of operating leverage at this level of output? 2.25 b. What is the degree of financial leverage? 1.64 c. What is the degree of combined leverage? 3.69 d. What is the break-even point in sales dollars for the firm? e. If the average unit cost is $11.25, what is the breakeven point in units?