Amalgamated, Inc Income Statement Year ended December
Amalgamated, IncIncome StatementYear ended December 31, 2016Net Sales 600,000Cost of Goods Sold (Variable) 320,000Contribution Margin 280,000Cash fixed costs 150,000Depreciation (fixed) 30,000Earnings before Interest and Taxes (EBIT) 100,000Interest expense (paid) 30,000Earnings before taxes (Taxable Income) 70,000Tax (expense) (30%) 21,000Net Income 49,000Required: Answer the following questions using the income statement above.1. Calculate the Degree of operating leverage (DOL).2. Calculate the Degree of financial leverage (DFL).3. Calculate the Degree of total leverage (DTL).4. Amalgamated is forecasting a 25 percent increase in sales for 2017. What is the projected percentage increase in net income if the calculations above hold true?
