1. Business
  2. Accounting
  3. 1 compute the degree of operating leverage round your answer...

Question: 1 compute the degree of operating leverage round your answer...

Question details

The Sterling Tire Companys income statement for 20X1 is as follows: STERLING TIRE COMPANY Income Statement For the Year Ended December 31, 20X1 Sales (21,000 tires at $62 each) Variable costs (21,000 tires at $31) Fixed costs Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Income tax expense (20%) Earnings after taxes (EAT) $ 1,302,000 651,000 410,000 $ 241,000 50,500 $ 190,500 38,100 $ 152,400

1). Compute the degree of operating leverage. (Round your answer to 2 decimal places.)
2).
Compute the degree of financial leverage

3)Compute the degree of combined leverage. (Round your answer to 2 decimal places.)
4)
Compute the break-even point in units. (Round your answer to the nearest whole number.)

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