Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (9,500 units at $225 each) $ 2,137,500 Variable costs (9,500 units at $180 each) 1,710,000 Contribution margin $ 427,500 Fixed costs 342,000 Income $ 85,500 1. Compute the companys degree of operating leverage. 2. If sales decrease by 4% in the next year, what will be the companys income? 3. Prepare a contribution margin income statement for the next year assuming sales decrease by 4%.

Hudson Company reports the following contribution margin income statement. 1. Compute the company's degree of operating leverage. 2. If sales decrease by 4% in the next year, what will be the company's income? 3. Prepare a contribution margin income statement for the next year assuming sales decrease by 4%. Complete this question by entering your answers in the tabs below. Compute the company's degree of operating leverage. (Round your answer to 1 decimal place.)