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a. Use the contribution margin approach to calculate the magnitude of operating leverage: b. Afterwards, use the operating leverage measure previously computed for Requirement A

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a. Use the contribution margin approach to calculate the magnitude of operating leverage: b. Afterwards, use the operating leverage measure previously computed for Requirement A to determine the amount of net income that Gibson Company will earn if it experiences a 15 percent increase in revenue. The sales price per unit is not affected. Note: Do not round intermediate calculations. Round "Operating leverage" to 2 decimal places. The following income statement applies to Gibson Company for the curront year: Required 2. Usw 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 Gibson Company wili eam if it experiences a 15 percent increase in revenue. The sales price per unit is not affected. c.1. Verify your answer to Requirement b by constructing on income statement based on a 15 percent increase in sales revenue. The sales price is not affected. 0.2. Calculate the percentage change in net income for the fwo income statements. Verify your answer to Requirement b by constructing an Income statement based on a 15 percent increase in sale: The sales price is not affected

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