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QUESTION

Use the following information about Rat Race Home Security, Inc. to answer the questions: Average selling price per unit $319.

Use the following information about Rat Race Home Security, Inc. to answer the questions:

Average selling price per unit $319.

Variable cost per unit $182

Units sold 366

Fixed costs $6,652

Interest expense 17,990

 Based on the data above, what will be the resulting percentage change in earnings per share of Rat Race Home Security, Inc. if they expect operating profit to change -4.8 percent?

(You should calculate the degree of financial leverage first).

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