Total Sales 10 000 units Selling Price Rs 200 per unit Variable Cost Rs 120 per unit Fixed operating...........

Finance( Revenue Account ) Others

Total Sales: 10,000 units

Selling Price: Rs. 200 per unit

Variable Cost: Rs. 120 per unit

Fixed operating Cost per unit of output: Rs. 60

Equity Share Capital: Rs. 3,00,000/-

16.25% Debt: Rs. 6,00,000/-

13% Preference Share Capital: Rs. 1,00,000/-

Tax rate: 35%

The Degree of Operating Leverage, Financial Leverage and Combined Leverage will be:

4; 2.42; 9.68

5.1; 2.5; 9

6.1; 3; 9

None of the above

Degree of Operating Leverage= Contribution /EBIT

= 8,00,000/2,00,000= 4

Degree of Financial Leverage = EBIT/EBIT- Interest -Preference Dividend before tax

= 2,00,000/ 2,00,000-97500- 20000=2.42

Degree of Combined Leverage= 4 x 2.42 = 9.68

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