-The Degree of Combined Leverage (DCL)is:
A) 3

question 21

Multiple Choice

$$\begin{array} { l r } \text { Sales } ( 30,000 \text { units } ) & \$ 150,000 \\\text { Variable costs } & \underline { 100,800 } \\\text { Contribution margin } & 49,200 \\\text { Fixed manufacturing costs } & \underline { 24,000 } \\\text { Operating Income } & 25,200 \\\text { Interest } & \underline { 18,000 } \\\text { Earnings Before Taxes } & 7,200 \\\text { Taxes } ( 30 \% ) & \underline { 2,160 } \\\text { Net Income } & \underline { \$ 5,040 } \\\text { Shares Outstanding } & 600\end{array}$$
-The Degree of Combined Leverage (DCL) is:

• A) 3.08x.
• B) 5.45x.
• C) 2.73x.
• D) 6.83x.

---

Definitions:

S Corporations

A special designation that allows small businesses to pass income directly to owners and avoid double taxation, while maintaining limited liability protection.