Question: sales 2 5 0 0 0 CD at $ 4 0 each. variable cost 2 5 0 0 0 CD at $ 1 5 .

sales 25000 CD at $40 each. variable cost 25000 CD at $15. contribution margin is 625000. Fixed costs is 500000, EBIT earnings before interest and taxes is 125000, interest expense 75000, EBT earnings before taxes 50000, income tax expense 32% which is $16000, earnings after taxes EAT $34000. Find the DOL, DFL, DCL. Using your answers to a and b. Calculate the percentage increase in EBIT and EBT from a 20 percent increase in sales volume. c )Does financial or operating leverage have the greater impact? DOL and DFL. d) Break- even point in units..Break- even point _______ tires? e) Break- even point considering the interest expense as a fixed cost...Break even point _____ tires?

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