Review Pictures.

The Sterling Tire Company's income statement for 20XX is as follows: STERLING TIRE COMPANY Income Statement Year ended December 31, 20Xx Sales (30,000 tires at $45 each) $ 1, 350,000 Less: Variable costs (30,000 tires at $30) 900, 000 Contribution margin 450,000 Less: Fixed costs 300,000 Earnings before interest and taxes (EBIT) 150,000 Interest expense 60,000 Earnings before taxes (EBT) 90,000 Income tax expense (35% ) 31,500 Earnings after taxes (EAT) 58, 500 Given this income statement, compute the following: a. Degree of operating leverage. (Round the final answer to 2 decimal places.) DOL X b. Degree of financial leverage. (Round the final answer to 2 decimal places.) DFL Xc-1. Degree of combined leverage. (Do not round the intermediate calculations. Round the final answer to 2 decimal places.) DCL X c-2. Using your answers to a. and b. calculate the percentage increase in EBIT and EBT from a 20 percent increase in sales volume. (Do not round the intermediate calculations. Round the final answers to 2 decimal places.) EBIT EBT c-3. Does financial or operating leverage have the greater impact? O DFL O DOLO d. Break-even point in units. (Round the final answer to the nearest whole number.) Break-even point tires e. Break-even point considering the interest expense as a fixed cost. Break-even point tires