Haunted Forest, Inc.is selling fog machines. Use the following information about Haunted Forest, Inc. to answer...
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 $328.
Variable cost per unit $208
Units sold 345
Fixed costs $15,907
Interest expense $3,001
Based on the data above, what is the degree of total (combined) leverage of Haunted Forest, Inc.?
Round the answer to two decimals
Homework Answers
| 1.84 | |
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| Statement showing Computations | |
| Particulars | Amount |
| Sales = 345*328 | 113,160.00 |
| Less Variable Expenses= 345 * 208 | (71,760.00) |
| Contribution Margin = 113,160 - 71,760 | 41,400.00 |
| Less Fixed cost | (15,907.00) |
| EBIT | 25,493.00 |
| Less Interest expense | (3,001.00) |
| EBT | 22,492.00 |
| degree of total (combined) leverage = Contribution / EBT = 41,400/22,492 | 1.84 |
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Haunted Forest, Inc.is selling fog machines.
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