Exerclse 18-25 Degree of operating leverage Lo A2 Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO Contribution Margin Income Statement For Yer Ended December 31, 2017 31e. (9,600 unit, at $225 each) variable co,t= (9,600 units at $180 each) Contribution margin Fixed costs Pretax income $2,160,000 1,728,000 $432,000 $ 108,000 1. Compute the company's degree of operating leverage for 2017. 2 If sales decrease by 5% in 2018, what will be the company's pretax income? 3. Assume sales for 2018 decrease by 5%. Prepare a contribution margin income statement for 2018. Complete this question by entering your answers in the tabs below Required 1Required 2 Required 3 Compute the company's degree of operating leverage for 2017. of operating Required 1 Required 2 Required 3 If sales decrease by 5% in 2018, what will be the company's pretax income? etax income Required 1 Required 2 Required 3 Assume sales for 2018 decrease by 5%. Prepare a contribution margin income statement for 2018. HUDSON CO Forecasted Contribution Margin Income Statement For Year Ended December 31, 2018 Sales Variable costs Contribution margin Fixed costs Income (pretax)