Haunted Forest, Inc.is selling fog machines.
Use the following information about Haunted Forest, Inc. to answer the following questions.
Average selling price per unit $301.
Variable cost per unit $203
Units sold 353
Fixed costs $15,279
Interest expense $4,190
Based on the data above, what is the degree of total (combined) leverage of Haunted Forest, Inc.?
Round the answer to two decimals
Thank you for the opportunity to help you with your question!
DFL = Q(P-V)-FC/[ Q(P-V)-FC-IE]
DFL = 353 x (301-203)-$15,279/[353 x (301-203)-$15,279-$4,190]
DFL = $19,315 /[$19,315-$4,190]
DFL = $19,315 /$15,125
DFL = 1.28
DOL = Q(P-V)/ /[ Q(P-V)-FC]
DOL = 353 x (301-203)/[ 353 x (301-203)-$15,279]
DOL = $34,594/ $19,315
DOL = 1.79
Total Combine leverage = DOL x DFL
Total Combine leverage = 1.79 x 1.28
Total Combine leverage
All answer are rounded to two decimal place .
Content will be erased after question is completed.
Enter the email address associated with your account, and we will email you a link to reset your password.
Forgot your password?