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Income Statement For the Year Ended December 31, 20X1 Sales (44,000 tires at $108 each) Variable costs (44,000 tires at $54) Fixed costs Earnings before
Income Statement For the Year Ended December 31, 20X1 Sales (44,000 tires at $108 each) Variable costs (44,000 tires at $54) Fixed costs Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Income tax expense (30%) Earnings after taxes (EAT) $ 4,752,000 2,376,000 640,000 $ 1,736,000 62,000 $ 1,674,000 502,200 $ 1,171,800 a. Compute the degree of operating leverage. (Round your answer to 2 decimal places.) Degree of operating leverage b. Compute the degree of financial leverage. (Round your answer to 2 decimal places.) Degree of financial leverage c. Compute the degree of combined leverage. (Round your answer to 2 decimal places.) Degree of combined leverage d. Compute the break-even point in units. (Round your answer to the nearest whole number.) Break-even point units
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