7. The Harding Company manufactures skates. The company's income statement for the 2014 is as follows: For the year ended December 31, 2014

Sales (10,000 skates @ $50 each) .............$500,000

Less: Variable costs (10,000 skates at $20...$200,000

Fixed Costs................................. 150,000 -----------------------------------------------------

Earnings before interest and taxes (EBIT)..... 150,000

Interest expense.............................. 60,000 -----------------------------------------------------

Earnings before taxes (EBT)................... 90,000

Income tax expense (40%)...................... 36,000 -----------------------------------------------------

Earnings after taxes (EAT)....................$ 54,000

Given this income statement, compute the following: a. Degree of operating leverage

b. Degree of financial leverage

c. Degree of combined leverage

d. Break-even point in units (numbers of skates)