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Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (9,600 units at $225

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Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (9,600 units at $225 each) Variable costs (9,600 units at $180 each) Contribution margin Fixed costs Income $ 2,160,000 1,728,000 $ 432,000 324, eee $ 108,000 1. Compute the company's degree of operating leverage. 2. If sales decrease by 5% 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 5%. 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. Degree of operating leverage Required 1 Required 2 > Required 1 Required 2 Required 3 If sales decrease by 5% in the next year, what will be the company's income? Income Prepare a contribution margin income statement for the next year assuming sales decrease by 5%. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales Variable costs Contribution margin Fixed costs 0 Income 0

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