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The Sterling Tire Company s income statement for 2 0 X 1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December

The Sterling Tire Companys income statement for 20X1 is as follows:
STERLING TIRE COMPANY
Income Statement
For the Year Ended December 31,20X1
Sales (26,000 tires at $72 each) $ 1,872,000
Variable costs (26,000 tires at $36)936,000
Fixed costs 460,000
Earnings before interest and taxes (EBIT) $ 476,000
Interest expense 53,000
Earnings before taxes (EBT) $ 423,000
Income tax expense (30%)126,900
Earnings after taxes (EAT) $ 296,100
Compute the degree of operating leverage.
Note: Round your answer to 2 decimal places.
Compute the degree of financial leverage.
Note: Round your answer to 2 decimal places.
Compute the degree of combined leverage.
Note: Round your answer to 2 decimal places.
Compute the break-even point in units.
Note: Round your answer to the nearest whole number.
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