$2.$ TLK Ltd$.$ manufactures small size fans to be used in load shedding areas. Each fan has a rechargeable battery and a built in charging circuit. TLK sells a fan for $$120.$ The annual sale is $30,000$ fans. Variable and fixed cost data is given below:

Variable expenses $$84$ per fan

Fixed expenses $$900,000$ per year

Required:

A$.$ Prepare contribution margin income statement and compute the degree of operating leverage.

B$.$ Next year the sales are expected to increase by $7,500$ fans. Compute $($a$)$ the expected percentage increase in net operating income $($b$)$ expected increase in net operating income and $($c$)$ expected total net operating income for the next year.