Sales (10,500 skates @ $60 each) $ 630,000
Less: Variable costs (10,500 skates at $25) 262,500
Fixed costs 200,000
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Earnings before interest and taxes (EBIT) 167,500
Interest expense 62,500
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Earnings before taxes (EBT) 105,000
Income tax expense (30%) 31,500
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Earnings after taxes (EAT) $ 73,500
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Enter only numeric value rounded to 2 decimal places.
a) Calculate the degree of operating leverage.
b) Calculate the degree of financial leverage.
c) Calculate the degree of combined leverage.
d) Calculate the break-even point in units (number of skates).