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Magic Realm Incorporated, has developed a new fantasy board game. The company sold 32,400 games last year at a selling price of $64 per game. Fixed expenses associated with the game total $567,000 per year, and variable expenses are $44 per game. Production of the game is entrusted to a printing contractor Variable expenses consist mostly of payments to this contractor Required: 1-a Prepare a contribution format income statement for the game last year 1-b. Compute the degree of operating leverage 2. Management is confident that the company can sell 38,880 games next year (an increase of 6,480 games, or 20%, over last year) Given this assumption: What is the expected percentage Increase in net operating income for next year? b. What is the expected amount of net operating income for next year? (Do not prepare an income statement use the degree of operating leverage to compute your answer)
Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2 Prepare a contribution format income statement for the game last year. Magic Realm, Incorporated Contribution Income Statement Total Per Unit 0 $ 0 $ 0 Reg 18>
1-a. Prepare a contribution format income statement for the game last year. 16 Compute the degree of operating leverage. 2 Management is confident that the company can sell 38,880 games next year (an increase of 6,480 games, or 20%, over last year). Given this assumption a. What is the expecthd percentage increase in net operating income for next year? b. What is the expected amount of net operating income for next year? (Do not prepare an income statement, use the degree of operating leverage to compute your answer) Complete this question by entering your answers in the tabs below. REGLA Reg 15 Reg2 Compute the degree of operating leverage Decree of operating Woerde RA
Required: 1a Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating leverage. 2 Management is confident that the company can sell 38,880 games next year (an increase of 6,480 games, or 20%, over last year). Given this assumption: a. What is the expected percentage increase in net operating income for next year? b. What is the expected amount of net operating income for next year? (Do not prepare an income statementuse the degree of operating leverage to compute your answer) Complete this question by entering your answers in the tabs below. RIA R16 Reg2 Management is condent that the company can selt 38,880 games next year (an increase of 6,480 games, or 20%, over last year). Given this assumption What is the expected percentage increase in net operating income for next year? b What is the expected amount of net operating income for next year? (Do not prepare an income statement; use the degree of operating leverage to compute your answer.) Show less Net operating income increases by Total expected net operating income R16