Question
the harding company manufactures skates. the company's income statement for 2013 is as follows: Harding Company income statement for the year ended december 31,2013 sales
the harding company manufactures skates. the company's income statement for 2013 is as follows: Harding Company income statement for the year ended december 31,2013 sales (10,500 skates @$60 each ........ 630,000 Less: variable costs (10,500 skates @ $25)...... 262,500 fixed costs ....... 200,000 earnings before interest and taxes (EBIT)...... $167,500 interest expense....... 62,500 earnings before taxes (EBT)...... $105,000 income tax expense (30%)....... 31,500 earnings after taxes (EAT)...... $73,500 given this income statement compute the following: a) degree of operating leverage b) degree of financial leverage c) degree of combined leverage d) break even point in units (# of skates)
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