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The Sterling Tire Company's Income statement for 2 0 XX is as follo STERLING TIRE COMPANY Income Statement Year ended December 3 1 , 2
The Sterling Tire Company's Income statement for XX is as follo STERLING TIRE COMPANY Income Statement Year ended December XX Sales tires at $ each Less: Variable costs tires at $ Contribution margin Less: Fixed costs Earnings before interest and taxes EBIT Interest expense Earnings before taxes EBT Income tax expense Earnings after taxes EAT Given this income statement compute the following : Degree of operating leverage Round the final answer to deci DOL b Degree of financial leverage Round the final answer to decin DFL Degree of combined leverage Do not round the intermediate Using your answers to aand b calculate the percentage increase in EBIT and EBT from a percent increase in sales volume. Do not round the intermediate calculations. Round the final answers to decimal places. EBIT EBT Does financial or operating leverage have the greater impact? DFL DOL d Breakeven point in unitsRound the final answer to the nearest whole number. Breakeven pointtires e Breakeven point considering the interest expense as a fixed cost Breakeven point tires
Fixed cost is
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