17-8 Straight Arrow Company manufactures golf balls. The following income statement information is relevant for Straight Arrow in 2010: breakeven analysis Selling price per sleeve of balls (P) Variable cost of goods sold (% of price, P) Fixed operating costs (F) Interest expense (1) Preferred dividends (Dps) Marginal tax rate (T) Number of common shares $ 5.00 75% $50,000 $10,000 $ 0.00 40% 20,000 a. What level of sales does Straight Arrow need to achieve in 2010 to break even with respect to operating income? b. At its operating breakeven, what will be the EPS for Straight Arrow? c. How many sleeves of golf balls (units) does Straight Arrow need to sell in 2010 to attain the financial breakeven point? [Hint: An easy way to look at this problem is to consider how many sleeves of balls (units) beyond those needed for operating breakeven Straight Arrow needs to sell to cover its fixed financial charges.] d. If Straight Arrow expects its sales to be $300,000 in 2010, what is its degree of operating leverage, its degree of financial leverage, and its degree of total (combined) leverage? Based on the degree of total leverage, compute the earnings per share you would expect in 2010 if sales actually turn out to be $270,000