Calculating Total Degree of Leverage

ABC Corporation is analyzing its financial performance and is particularly interested in understanding its leverage. For the fiscal year, ABC reported a contribution margin of $500,000, fixed operating costs of $300,000, and fixed financing costs of $100,000. Based on this information, calculate the Total Degree of Leverage (TDL) at a sales level of $1,000,000.

Remember, the Total Degree of Leverage is calculated using the formula: TDL = Contribution Margin / Earnings Before Interest and Taxes (EBIT). You will also need to calculate EBIT first, which is defined as Contribution Margin minus Fixed Costs (both operating and financing).