Use the following information to answer the next four questions: $150,000 100,80

Question

Use the following information to answer the next four questions:

$150,000
100,800

$49,200
24,000

$25,200
18,000

$7,200
2160

$5,040

Shares Outstanding

600

The Degree of Financial Leverage (DFL) is

Question 30 options:

3.50x

1.40x

1.95x

1.58x

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Question 31 (1 point)

The Degree of Combined Leverage (D.C.L.) is

Question 31 options:

3.08x

5.45x

2.73x

6.83x

Sales (30,000 units)
Variable Costs

$150,000
100,800

Contribution margin
Fixed manufacturing costs

$49,200
24,000

Operating Income
Interest

$25,200
18,000

Earnings before taxes
Taxes (30%)

$7,200
2160

Net Income

$5,040

Shares Outstanding

600

Explanation / Answer

Particulars Amount Sales        150,000.00 Variable costs        100,800.00 Contribution          49,200.00 Fixed Manufacturing Costs          24,000.00 Operating Income          25,200.00 Interest          18,000.00 Earning before taxes            7,200.00 Taxes            2,160.00 Net Income            5,040.00 DFL = Operating income/Earning before taxes DFL = 25200/7200 DFL = 3.50 DCL = Contributioon/EBT DCL = 49200/7200 DCL =6.83

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