Bulldog Inc. has fixed operating costs of $400,000, variable operating costs of $20 per unit, and a selling price of $70 per unit. Interest expense is $100,000 per year. Bulldog has a 21% tax rate. Calculate the firms EBIT when it sells 12,000 units.

An analyst projects that company ABCs sales will increase from $1.2 million to $1.4 million. COGS will increase from $600 thousand to $680 thousand, but fixed costs and depreciation expense should remain steady at $200 thousand and $100 thousand, respectively. Interest paid will increase from $100 thousand to $120 thousand. The firms tax rate will hold steady at 25%. All else being equal, what is the firms degree of operating leverage?

Bulldog Inc. has fixed operating costs of $400,000, variable operating costs of $20 per unit, and a selling price of $70 per unit. Interest expense is $100,000 per year. Bulldog has a 21% tax rate. Calculate the firms degree of operating leverage when it increases sales from 12,000 units to 13,000.