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he Sterling Tire Company s income statement for 2 0 X 1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December

he Sterling Tire Companys income statement for 20X1 is as follows:
STERLING TIRE COMPANY
Income Statement
For the Year Ended December 31,20X1
Sales (41,000 tires at $102 each) $ 4,182,000
Variable costs (41,000 tires at $51)2,091,000
Fixed costs 610,000
Earnings before interest and taxes (EBIT) $ 1,481,000
Interest expense 60,500
Earnings before taxes (EBT) $ 1,420,500
Income tax expense (30%)426,150
Earnings after taxes (EAT) $ 994,350
Compute the degree of operating leverage.
Note: Round your answer to 2 decimal places.
Compute the degree of financial leverage.
Note: Round your answer to 2 decimal places.
Compute the degree of combined leverage.
Note: Round your answer to 2 decimal places.
Compute the break-even point in units.
Note: Round your answer to the nearest whole number.tt

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