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ABC Corporation presented the following results for the 2019 financial year: Sales (100,000 units) $1 799 000 Variable costs 487 000 Contribution margin 1 312
ABC Corporation presented the following results for the 2019 financial year: Sales (100,000 units) $1 799 000 Variable costs 487 000 Contribution margin 1 312 000 Fixed manufacturing costs 400 000 Operating income 912 000 Interest 120 000 Earnings before taxes 792 000 Taxes (at 35%) 277 200 Net income 514 800 Shares outstanding 15,000 Given this income statement, calculate ABCs: a. Break-even point in units Answer: ____ b. Degree of operating leverage Answer: ____ c. Degree of financial leverage Answer: ____ d. Degree of combined leverage Answer: ____ e. The operating profit or loss at 40,000 and 70,000 units Answer: ____
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