Hudson Company reports the following contribution margin income statement. Complete this question by entering your answers in the tabs below.

Compute the company's degree of operating leverage.

Degree of operating leverage Complete this question by entering your answers in the tabs below.

If sales decrease by $5\%$ in the next year, what will be the company's income? Prepare a contribution margin income statement for the next year assuming sales decrease

$\begin{array}{cc}\text{H}\text{U}\text{D}\text{S}\text{O}\text{N}\text{C}\text{O}\text{M}\text{P}\text{A}\text{N}\text{Y}& ?\\ \text{C}\text{o}\text{n}\text{t}\text{r}\text{i}\text{b}\text{u}\text{t}\text{i}\text{o}\text{n}\text{M}\text{a}\text{r}\text{g}\text{i}\text{n}\text{I}\text{n}\text{c}\text{o}\text{m}\text{e}\text{S}\text{t}\text{a}\text{t}\text{e}\text{m}\text{e}\text{n}\text{t}& ?\\ \text{F}\text{o}\text{r}\text{Y}\text{e}\text{a}\text{r}\text{E}\text{n}\text{d}\text{e}\text{d}\text{D}\text{e}\text{c}\text{e}\text{m}\text{b}\text{e}\text{r}31& ?\\ \text{S}\text{a}\text{l}\text{e}\text{s}& ?\\ \text{V}\text{a}\text{r}\text{i}\text{a}\text{b}\text{l}\text{e}costs& ?\\ \text{C}\text{o}\text{n}\text{t}\text{r}\text{i}\text{b}\text{u}\text{t}\text{i}\text{o}\text{n}\text{m}\text{a}\text{r}\text{g}\text{i}\text{n}& ?\\ \text{F}\text{i}\text{x}\text{e}\text{d}costs& ?\\ \text{I}\text{n}\text{c}\text{o}\text{m}\text{e}& ?\end{array}$

HUDSON COMPANY

Contribution Margin Income Statement

For Year Ended December $31$

Sales $(9,600$ units at $$225$ each$)$ $ $2,160,000$

Variable costs $(9,600$ units at $$180$ each$)1,728,000$

Contribution margin $ $432,000$

Fixed costs $324,000$

Income $ $108,000$

Compute the company$$s degree of operating leverage.

If sales decrease by $5\%$ in the next year, what will be the company$$s income?

Prepare a contribution margin income statement for the next year assuming sales decrease by $5\%.$