Freudian Slips and Gowns, Inc.s income statement for 20XX is as follows:

FREUDIAN SLIPS AND GOWNS Income Statement Year ended December 31, 20XX
Sales (30,000 units at $25)	$	750,000
Less: Variable costs (30,000 units at $7)		210,000
Contribution margin		540,000
Less: Fixed costs		270,000
Operating profit or (EBIT)		270,000
Interest expense		170,000
Earnings before taxes (EBT)		100,000
Income tax expense (25%)		25,000
Earnings after taxes (EAT)	$	75,000

Given this income statement, compute the following:

a. Degree of operating leverage.

DOL

b. Degree of financial leverage. (Round the final answer to 1 decimal place.)

DFL

c-1. Degree of combined leverage. (Do not round the intermediate calculations. Round the final answer to 1 decimal place.)

DCL

c-2. This part of the question is not part of your Connect assignment.

c-3. Does financial or operating leverage have the greater impact?

d. Break-even point in units.

BE units

e. Break-even point considering the interest expense as a fixed cost. (Round your final answer to nearest whole number.)

BE units