DEF Enterprises has reported the following data for the year 2023:

• Revenue: $600,000
• Direct Costs: $350,000
• Overhead Costs: $100,000
• Selling Expenses: $70,000
• Loan Interest: $20,000
• Tax Provision: $30,000

Requirements:

1. Prepare an income statement.
2. Calculate the gross profit.
3. Determine the operating profit.
4. Compute the net profit.
5. Discuss the effect of a 20% increase in overhead costs on the operating profit.