Use the following information about Rat Race Home Security, Inc. to answer the questions: Average selling price per unit $324. Variable cost per unit $187 Units sold 449 Fixed costs $8,589 Interest expense 17,204  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 4.2 percent? (You should calculate the degree of financial leverage first). (Write the percentage sign in the "units" box).

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Cost volume profit (CVP) analysis

CVP analysis is a cost-volume-profit technique of cost accounting that examines the influence of varying levels of expenses and volume on operating profit. Cost Volume Profit analysis determines the relationship between Cost, Sale Volume, sales price, and Profit. CVP analysis is also known as break-even analysis which helps the business organization, banks, and their management to determine and forecast how a change in total sales and cost affects the profit of the organization. CVP analysis helps in financial decision-making for the budget, expense, tax, market investment, and corporate finance and aims at measuring variations in cost and volume.