Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (9,000 units at $300 each) Variable costs (9,000 units at $240 each) Contribution margin: Fixed costs Income $ 2,700,000 2,160,000 $ 540,000 420,000 $ 120,000 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%.

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