Sales (75,000units) P 750,000 Variable costs 225,000 Contribution margin P 525, 000 Fixed manufacturing costs 187,500 Operating income P 337,000 Interest 75,000 Earnings before taxes P 262,500 Taxes (at 31%) 81,375 Net income P 181,125 Shares outstanding 15,000 The degree of operating leverage is a. 1.43x b. 1.56x c. 3.33x d. 2.22

Sales (75,000units) P 750,000 Variable costs 225,000 Contribution margin P 525, 000 Fixed manufacturing costs 187,500 Operating income P 337,000 Interest 75,000 Earnings before taxes P 262,500 Taxes (at 31%) 81,375 Net income P 181,125 Shares outstanding 15,000 The degree of operating leverage is a. 1.43x b. 1.56x c. 3.33x d. 2.22

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter12: Capital Structure

Section: Chapter Questions

Problem 10PROB

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