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Compute the Degree of Operating Leverage at 20,000 units , for the company below: Wolfgang's Steak House Income Statement for Year Ended December 31, 2019
Compute the Degree of Operating Leverage at 20,000 units , for the company below: Wolfgang's Steak House Income Statement for Year Ended December 31, 2019 $1,00 Sales (20,000 units @ $50 each) 0,000 Less: Variable costs (20,000 units @ $20 each) 400,000 Less Fixed Costs 200,000 Earnings before interest & taxes(EBIT) $400,000 Interest expense 75,000 Earnings before taxes $325,000 Income tax expense (30%) 97,500 Earnings after taxes $227,500 A.A. 2.0 B. B. 0.5 C.C. 1.5 D.D. Can not be computed at the level of production Compute the Degree of Financial Leverage for the company below: Wolfgang's Steak House Income Statement for Year Ended December 31, 2019 $1,00 Sales (20,000 units @ $50 each) 0,000 Less: Variable costs (20,000 units @ $20 each) 400,000 Less Fixed Costs 200,000 Earnings before interest & taxes(EBIT) $400,000 Interest expense 75,000 Earnings before taxes $325,000 Income tax expense (30%). 97,500 Earnings after taxes $227,500 O A. A. 1.23 B.B. .08 C.C.2.3 D.D. 0.0
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