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2 The following income statement applies to Perez Company for the current year Income Statement Sales revenue 380 units S35) Variable cost (380 units $20)
2 The following income statement applies to Perez Company for the current year Income Statement Sales revenue 380 units S35) Variable cost (380 units $20) Contribution nargin Fixed cost $13,300 7,600) 5,700 (4,500) 5 1,200 6.66 points Net income eBook Required a. Use the contribution margin approach to calculate the magnitude of operating leverage. b. Use the operating leverage measure computed in Requirement a to determine the amount of net income that Perez Company will earn if it experiences a 20 percent increase in revenue. The sales price per unit is not affected. c-1. Verify your answer to Requirement b by constructing an income statement based on a 20 percent increase in sales revenue. The sales price is not affected c-2. Calculate the percentage change in net income for the two income statements. Hint Print References Complete this question by entering your answers in the tabs below Req A and B Req C1 Req C2 Use the contribution margin approach to calculate the magnitude of operating leverage. Afterwards, use the operating leverage measure previously computed for Requirement A to determine the amount of net income that Perez Company will earn if it experiences a 20 percent increase in revenue. The sales price per unit is not affected. (Do not round intermediate calculations. Round "Operating leverage" to 1 decimal place.) Show lessA a Operating leverage b. Net income times Req A and B
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