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The Sterling Tire Company's income statement for 20X1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December 31, 20x1 Sales (41,000
The Sterling Tire Company's income statement for 20X1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December 31, 20x1 Sales (41,000 tires at $102 each) Variable costs (41,000 tires at $51) Fixed costs Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Income tax expense (30%) Earnings after taxes (EAT) $4,182,000 2,091,000 610,000 $1,481,000 60,500 $1,420,500 426,150 $ 994,350 a. Compute the degree of operating leverage. (Round your answer to 2 decimal places.) Degree of operating leverage
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