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
Thank you for the opportunity to help you with your question!
Please download the solution file EPS.xlsx
earnings per share decrease by 4.70% .
If you need more help chat is available for you to discuss this concept.
hi, what did you calculate to get -4.70?
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.
Thank you. This helped a lot!
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