Sales $(75,000$ units$)$

$$750,000$

Variable costs

$225,000$

Contribution margin

$525,000$

Fixed manufacturing costs

$187,500$

Operating income

$337,500$

Interest

$75,000$

Earnings before taxes

$262,500$

Taxes $($at $31\%)$

$81,375$

Net income

$$181,125$

Shares outstanding

$15,000$

The Degree of Financial Leverage is:

a

$3\mathrm{.}50$x$.$

b

$1\mathrm{.}29$x$.$

c

$1\mathrm{.}32$x$.$

d

$4\mathrm{.}50$x$.$