Haunted Forest, Inc.is selling fog machines. Use the following information about

Question

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 $190

Units sold 331

Fixed costs $15,893

Interest expense $3,606

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 -1.0 percent?

(You should calculate the degree of total (combined) leverage first).

(Write the percentage sign in the "units" box).

Round the answer to two decimals

Your Answer:

Explanation / Answer

Amount $ Selling Price per unit 325 Lee Variable cost per unit 190 Contribution per unit 135 Units sold 331 Total contribution 44685 Less Fixed cost 15893 Operating Profit 28792 Less interest 3606 Earning for Equity 25186 Degree of Total Leverage (Contribution/Earning for Equity) 1.77 % change in EPS due to change in expected sales -1% -1.77

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