**Answer:**

**a. 1.55**

**b. 2.39**

**c. 3.70**

**Explanation:**

a. The computation of the degree of operating leverage is shown below:

**= (Sales - Variable costs) ÷ (Sales - Variable costs - Fixed costs)**

= ($960,000 - $532,000) ÷ ($960,000 - $532,000 - $151,000)

= $428,000 ÷ $277,000

**= 1.55**

The (Sales - Variable costs) = Contribution margin

The (Sales - Variable costs - Fixed costs) = EBIT

b. The computation of the degree of financial leverage is shown below:

**= (EBIT) ÷ (EBIT - Interest expense)**

= ($277,000) ÷ ($277,000 - $161,000)

= ($277,000) ÷ ($116,000)

**= 2.39**

c. The computation of the degree of total leverage is shown below:

**= Degree of operating leverage × degree of financial leverage**

= 1.55 × 2.39

**= 3.70**