The Harding Company manufactures skates. The company's income statement for 20XX is as follows:

HARDING COMPANY

Income Statement

Year ended December 31, 20XXSales (10,000 skates at $50)$500,000Less: Variable costs (10,000 skates at $20)200,000Contribution margin300,000Less: Fixed costs150,000

Operating profit or (EBIT)150,000Interest expense60,000Earnings before taxes (EBT)90,000Income tax expense (40%)36,000Earnings after taxes (EAT)$54,000

Given this income statement, compute the following:

a.Degree of operating leverage.(Round the final answer to 2 decimal places.)

DOLX

b.Degree of financial leverage.(Round the final answer to 4 decimal places.)

DFLX

c-1.Degree of combined leverage.(Do not round the intermediate calculations. Round the final answer to 2 decimal places.)

DCLX

c-2.Using your answers toa.andb.calculate the percentage increase in EBIT and EBT from a 30 percent increase in sales volume