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Company manufactures skates The company’s income statement for 2013 is as follows HARDING COMPANY Income Statement For the Year Ended December

Company manufactures skates. The company’s income statement for 2013 is as follows: HARDING COMPANY Income Statement For the Year Ended December 31, 2013 Sales (10,500 skates @ $60 each) ......... $630,000 Less: Variable costs (10,500 skates at $25) ...... 262,500 Fixed costs .................... 200,000 Earnings before interest and taxes (EBIT) ........ 167,500 Interest expense .................. 62,500 Earnings before taxes (EBT) ............ 105,000 Income tax expense (30%) .............. 31,500 Earnings after taxes (EAT) .............. $ 73,500 Given this income statement, compute the following: a. Degree of operating leverage. b. Degree of financial leverage. c. Degree of combined leverage. d. Break-even point in units (number of skates).

Apr 01 2020 View more View Less

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