Hudson Co. reports the contribution margin income statement for 2019.

HUDSON CO.
Contribution Margin Income Statement
For Year Ended December 31, 2019
Sales (12,000 units at $225 each)	$	2,700,000
Variable costs (12,000 units at $180 each)		2,160,000
Contribution margin	$	540,000
Fixed costs		360,000
Pretax income	$	180,000

1. Compute the companys degree of operating leverage for 2019. 2. If sales decrease by 4% in 2020, what will be the companys pretax income? 3. Assume sales for 2020 decrease by 4%. Prepare a contribution margin income statement for 2020.