5.

Magic Realm, Incorporated, has developed a new fantasy board game. The company sold 43,000 games last year at a selling price of $62 per game. Fixed expenses associated with the game total $774,000 per year, and variable expenses are $42 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Requlred: 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 52.030 games nexa year (an increase of 9.030 games, or 2 thk, over last yean), Glven 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.) Complete this question by entering your answers in the tabs below. Prepare a contribution format income statement for the game last year: variable expenses are $42 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 yeat, 1-b. Compute the degree of operating leverage. 2. Management is confident that the company can sell 52,030 games next year (an increase of 9.030 games. or 21%. 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.) Complete this question by entering your answers in the tabs below. Compute the degree of operating leverage. yean. 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 nextyear? (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. Management is confident that the company can sell 52,030 games next year (an incresse of 9.030 games, or 21%, over last yearf. Given this assumption th a. What is the expected percentage increase in not operating income for next year? b. What is the expected amount of net operating income for next year? (Do not arepare an income statement use the degroe of operating leverage to compute your answer)