Magic Realm, developed a new tantasy board game and sold $28,800$ units last year at a selling price of $$61$ per game. Fixed expenses associated with the game are $$480,000$ per year, and variable expenses are $$41$ per game. Production of the game was outsourced to a printing contractor, so variable expenses consist mostly of payments to this contractor.

Required:

$1-$a$.$ Prepare a contribution format income statement for the game last year.

$1-$b$.$ Compute the degree of operating leverage.

Management is confident that the company can sell $36,288$ games next year $($an increase of $7,488$ games, or $26\%,$ over last

year$).$ Given this assumption:

a$.$ What is the expected percentage increase in net operating income for next year?

b$.$ What is the expected amount of net operating income for next year? $($Do not prepare an income statement; use the degree

of operating leverage to compute your answer.$)$

Finish this question by entering your answers in the tabs below.

Req $2-$ Prepare a contribution format income statement for the game last year.