FRIENDLY PIE, INC. Income Statement For the Year Ended December 31, 2022

Sales (200,000 units at $45) . . . . . . . . 9,000,000

Less: Variable Costs (200,000 units at $15) . . . 3,000,000

Contribution 6,000,000

Fixed Costs . . . . . . . . . . . . . . . 2,000,000

Earnings Before Interest and Taxes . . . . . . . . 4,000,000

Interest Expense . . . . . . . . . . . . . . . . . . . . . . 1,000,000

Earnings Before Taxes (EBT) . . .. . . . . . . . 3,000,000

Income Tax Expense (Including State taxes, 30%) 900,000

Earnings After Taxes (EAT) . . . . . . . . . . . 2,100,000

Given this income statement, compute the following:

Degree of Operating Leverage.

Degree of Financial Leverage.

Degree of Combined Leverage.

Break-Even point in units and dollars.