Overboard Sporting GoodsIncome StatementFor the Year Ended December 31, 2020

Sales (300,000 units)$6,000,000Variable costs3,600,000Contribution margin2,400,000Fixed costs1,680,000Operating income (EBIT)720,000Interest expense210,000Earnings before taxes510,000Income taxes127,500Net income$382,500

Assume that interest is a fixed expense

Required:

Using the above financial statements, answer each of the following questions:

Calculate the break-even point in $

Calculate the break-even point in units

Calculate the degree of operating leverage

Calculate the degree of financial leverage

Calculate the degree of combined leverage

Management believes that sales will increase by 20% next year.Using the degree of combined leverage that you calculated previously, what will be the new net income before taxes?