Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. the harding company manufactures skates. the compa

The Harding Company manufactures skates. The companys income statement for 20X1 is as follows: HARDING...

90.2K

Verified Solution

Question

Finance

The Harding Company manufactures skates. The companys income statement for 20X1 is as follows:

HARDING COMPANY Income Statement For the Year Ended December 31, 20X1

Sales (11,900 skates @ $88 each) $ 1,047,200

Variable costs (11,900 skates at $39) 464,100

Fixed costs 340,000

Earnings before interest and taxes (EBIT) $ 243,100

Interest expense 69,500

Earnings before taxes (EBT) $ 173,600

Income tax expense (20%) 34,720

Earnings after taxes (EAT) $ 138,880

a. Compute the degree of operating leverage. (Round your answer to 2 decimal places.)

b. Compute the degree of financial leverage. (Round your answer to 2 decimal places.)

c. Compute the degree of combined leverage. (Round your answer to 2 decimal places.) d. Compute the break-even point in units (number of skates). (Round your answer to the nearest whole number.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

An ecosystem isa. all the organisms in a community and the abiotic environment in which...

General Management
1.2K views

what decision making style best describes me and what are the pros & cons of the...

Biology
1.2K views

What was a major morphological criterion on which the traditional classification of animals wasbased?presence or...

Basic Math
1.2K views

Complete the sentence below. If 9^x = 9^6, then x = If 9^3x = 9^6,...

Algebra
1.2K views

x x5 3 x5 5x 6 f x 4x3 3x 3x 2 x 1

Algebra
1.2K views

7 Let V be the subset of P3 consisting of all polynomials of the form...

Accounting
1.2K views

At December 31,2023, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances...

Accounting
1.2K views

The following selected transactions were taken from the books of Ripley Company for Year 1:...

Accounting
1.2K views

Exercise 6-17 a1-a3 (Video) Sunland Company reports the following for the month of June. Date...

Accounting
1.2K views

Which of the following is an eligible expense for the lifetime learning credit? A language...

Finance
1.2K views

What is forcasted net income in Year 5?

Accounting
1.2K views

question 8 CHA. 2 connect Required information [The following...