Use the below information to answer the following question. Sales (100,000 units)$1,000,000 Variable costs 300,000 Contribution margin 700,000 Fixed manufacturing costs 200,000 Operating income 500,000 Interest 75,000 Earnings before taxes 425,000 Taxes (30%) 127,500 Net income$297,500 Refer to the table. The degree of financial leverage is _____

degree of financial leverage = whereEBIT = Earnings before interest and taxEBT = earnings before…

Answered: Use the below information to answer the…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 11MCQ: Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett...

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Use the below information to answer the following question.


Sales (100,000 units)	$	1,000,000
Variable costs		300,000
Contribution margin		700,000
Fixed manufacturing costs		200,000
Operating income		500,000
Interest		75,000
Earnings before taxes		425,000
Taxes (30%)		127,500
Net income	$	297,500

Refer to the table. The degree of financial leverage is _____

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