1. Variable expense per unit 2. Break-even point in units Break-even point in dollar sales $ 19.60 17,500 $ 490,000 3. Unit sales needed to attain target profit 25,000 Dollar sales needed to attain target profit $ 700,000 4. New break-even point in unit sales 13,125 New break-even point in dollar sales $ 600,000 Dollar sales needed to attain target profit $ 750,000 Magic Realm, Inc., Contribution Income Statement Sales Variable expenses Contribution margin Fixed expenses Net operating income Total Per Unit $ 2,881,000 $ 67 47 20,210,000 (17,329,000) $ 20 774,000 $ (18,103,000) 20 Compute the degree of operating leverage. Degree of operating leverage 10 Management is confident that the company can sell 52,460 games next year (an increase of 9,460 games, or 22%, 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 statement; use the degree of operating leverage to compute your answer.) a. Net operating income increases by b. Total expected net operating income 220% $ 266,600 Show less