Exercise 18-25 Degree of operating leverage LO A2 Hudson Co. reports the contribution margin income statement for 2019, HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,600 units at $225 cach) Variable costs (9,600 units at $180 each) Contribution margin Tixed costs Pretax income $2,160,000 1.728,000 $ 432,000 324,000 $ 108,000 1. Compute the company's degree of operating leverage of 2019. 2. If sales decrease by 5% in 2020, what will be the company's pretax income? 3. Assume sales for 2020 decrease by 5%. Prepare a contribution margin income statement for 2020. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the company's degree of operating leverage for 2019, Degree of operating leverage Exercise 18-25 Degree of operating leverage LO A2 Hudson Co. reports the contribution margin income statement for 2019. * HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales (9,600 units at $225 each) Variable conta (9,600 units at $180 each) Contribution margin Fixed costs Pretax income $2,160,000 1,728,000 $ 432,000 324,000 $ 108,000 ces 1. Compute the company's degree of operating leverage for 2019, 2. If sales decrease by 5% in 2020, what will be the company's pretax income? 3. Assume sales for 2020 decrease by 5%. Prepare a contribution margin income statement for 2020. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 If sales decrease by 5% in 2020, what will be the company's pretax income? Pretax income Variable costs (9,600 units at $180 each) Contribution margin Fixed costs Pretax income 1,728,000 $ 432,000 324,000 $ 108,000 1. Compute the company's degree of operating leverage for 2019. 2. If sales decrease by 5% in 2020, what will be the company's pretax income? 3. Assume sales for 2020 decrease by 5%. Prepare a contribution margin income statement for 2020. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume sales for 2020 decrease by 5%. Prepare a contribution margin income statement for 2020. HUDSON CO. Forecasted Contribution Margin Income Statement For Year Ended December 31, 2020 Sales Variable costs Contribution margin Fixed costs Income (pretax)