1. Explain the primary reasons for the change in earnings per share between Figure 2 and Figure 4.
2. To determine the extent the company is more leveraged than it was prior to changes suggested by Mike Anton, compute degree of operating leverage (DOL), degree of financial leverage (DFL), and degree of combined leverage (DCL) both for Figure 2 (before changes) and Figure 4 (after changes). Use equations 54, 56, and 510 from the text.

GENUINE MOTOR PRODUCTS Pro Forma Income Statement For 20XX Sales (1,000,000 units @ \$30 per unit) (1,000,000 units @\$25 per unit) Contribution margin