##### What is the total combined leverage?

 Business & Finance Tutor: None Selected Time limit: 1 Day

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 \$325.

Variable cost per unit \$187

Units sold 369

Fixed costs \$15,287

Interest expense \$4,183

Based on the data above, what will be the resulting percentage change in earnings per share if they expect units produced and sold to change -2.9 percent?

Round the answer to two decimals

Oct 3rd, 2015

earnings per share decrease by 4.70% .

If you need more help chat is available for you to discuss this concept.

Oct 3rd, 2015

hi, what did you calculate to get -4.70?

Oct 4th, 2015

Degree of total leverage = Contribution margin / Earning before tax

Degree of total leverage =  \$50,922/ \$31,452 = 1.62

Change in EPS = Degree of total leverage  x Percentage change in Sales

Change in EPS = 1.62 x -2.9% = -4.70%

I hope, it will helpful for you.

Oct 4th, 2015

Thank you. This helped a lot!

Oct 4th, 2015

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Oct 3rd, 2015
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Oct 3rd, 2015
Dec 10th, 2016
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