Trident Food Corporation generated the following income statement for the most recent fiscal year:
Sales revenues $150,000
Variable cost of sales (112,500)
Gross profit 37,500
Fixed operating costs (24,000)
Net operating income (EBIT) 13,500
Interest (10,000)
Earnings before taxes 3,500
Taxes (40%) (1,400)
Net income 2,100
Which of the following is the degree of total leverage for Trident Foods?

Question

Trident Food Corporation generated the following income statement for the most recent fiscal year: 
Sales revenues   $150,000
Variable cost of sales   (112,500)
Gross profit   37,500
Fixed operating costs   (24,000)
Net operating income (EBIT)  13,500
Interest (10,000)
Earnings before taxes 3,500
Taxes (40%) (1,400)
Net income 2,100
Which of the following is the degree of total leverage for Trident Foods?

Quizplus · Accepted Answer

The Answer of Trident Food Corporation generated the following income statement for the most recent fiscal year: 
Sales revenues   $150,000
Variable cost of sales   (112,500)
Gross profit   37,500
Fixed operating costs   (24,000)
Net operating income (EBIT)  13,500
Interest (10,000)
Earnings before taxes 3,500
Taxes (40%) (1,400)
Net income 2,100
Which of the following is the degree of total leverage for Trident Foods?

Trident Food Corporation Generated the Following Income Statement for the Most