HARMON COMPANYIncome StatementFor the Year Ended December 31 2008Sales (30000 sk

HARMON COMPANYIncome StatementFor the Year Ended December 31 2008Sales (30000 skates @ $25) . . . . . . . . . . . . . . . . . . . . . . . . . . . $750000Less: Variable costs (30000 skates at $7) . . . . . . . . . . . . . . . 210000Fixed costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270000Earnings before interest and taxes (EBIT) . . . . . . . . . . . . . . . . . 270000Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170000Earnings before taxes (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100000Income tax expense (35%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35000Earnings after taxes (EAT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 65000Given this income statement compute the following:a. Degree of operating leverage.b. Degree of financial leverage.c. Degree of combined leverage.d. Break-even point in units.