##### What is the degree of combined leverage for this question?

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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

Oct 3rd, 2015

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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

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 = 2.29

All answer are rounded to two decimal place .

Please let me know if you need any clarification. I'm always happy to answer your questions.
Oct 3rd, 2015

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Oct 3rd, 2015
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Oct 3rd, 2015
Sep 24th, 2017
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