Question 23. HW 1.

The Harding Company manufactures skates. The company's income statement for 20x1 is as follows: HARDING COMPANY Income Statement For the Year Ended December 31, 20X1 Sales (12,000 skates @ $90 each) $1,080,000 Variable costs (12,000 skates at $40) 480,000 Fixed costs 350.000 Earnings before interest and taxes (EBIT) $ 250,000 Interest expense 70,000 Earnings before taxes (EBT) $ 180,000 Income tax expense (30%) 54,000 Earnings after taxes (EAT) $ 126,000 a. Compute the degree of operating leverage. (Round your answer to 2 decimal places.) Degree of operating leverage _ b. Compute the degree of nancial leverage. (Round your answer to 2 decimal places.) Degree of nancial 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 (number of skates). (Round your answer to the nearest whole number.)