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Use the Below Information to Answer the Following Question Refer to the Table

Question 96

Multiple Choice

Use the below information to answer the following question.
 Sales (100,000 units ) $1,000,000 Variable costs 300,000 Contribution margin 700,000 Fixed manufacturing costs 200,000 Operating income 500,000 Interest 75,000 Earnings before taxes 425,000 Taxes (30%) 127,500 Net income $297,500\begin{array}{lr}\text { Sales }(100,000 \text { units }) & \$ 1,000,000 \\\text { Variable costs } & 300,000\\\text { Contribution margin } & 700,000 \\\text { Fixed manufacturing costs } & 200,000\\\text { Operating income } & 500,000 \\\text { Interest } & 75,000\\\text { Earnings before taxes } & 425,000 \\\text { Taxes }(30 \%) & 127,500\\\text { Net income }&\$297,500\end{array}
Refer to the table. The degree of combined leverage is ________.


A) 2.22x
B) 1.90x
C) 2.95x
D) 1.65x

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