Following is the latest income statement for Surfside Airlines: Sales $150,000 Variable operating costs .. (105,000)

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Following is the latest income statement for Surfside Airlines:

Sales …………………………………………………    $150,000

Variable operating costs …………………..     (105,000)

Gross profit …………………………........……        45,000

Fixed operating costs ………………………       (20,000)

Net operating income …………………..…        25,000

Interest ……………………………..............…       (15,000)

Earnings before taxes .........................        10,000

Taxes (40%) …………………………......……          (4,000)

Net income …………………………….....…..       $ 6,000

Compute Surfside’s degree of operating leverage (DOL), degree of financial leverage (DFL), and degree of total leverage (DTL).

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CFIN

ISBN: 978-1305666870

5th edition

Authors: Scott Besley, Eugene Brigham

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