Magic Realm, Inc. has developed a new fantasy board game. The company sold 25 200 games last year at a selling price of $57 per game. Fixed expenses associated with the game total $420,000 per year and variable expenses are $47 per game. Production of the game is entrusted to a printing contractor Variable expenses consist mostly of payments to this contractor Required: 1-a Prepare a contribution format income statement for the game last year 16. Compute the degree of operating leverage 2. Management is confident that the company can tell 32,256 games next year (an increase of 7056 games, or 28%, 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) Complete this question by entering your answers in the tabs below. Reg 1A Req Reg 2 Prepare a contribution format income statement for the game last year Magic Realm, Inc. Contribution Income Statement Total Per Unit Roq 18 > Exercise 6-15 Operating Leverage (LO6-1, LO6-8] Magic Realm, Inc, has developed a new fantasy board game. The company sold 25 200 games last year at a selling price of $67 per game. Fixed expenses associated with the game total $420,000 per year, and variable expenses are $47 per game Production of the game is entrusted to a printing contractor Variable expenses consist mostly of payments to this contractor Required: 1-a. Prepare a contribution format income statement for the game last year 1-5. Compute the degree of operating leverage 2. Management is confident that the company can sell 32,256 games next year (an increase of 7,056 games, or 28% over last year) Given this assumption a What is the expected percentage increase in net operating income for next year? . 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) Complete this question by entering your answers in the tabs below. RIA Reg 1B Reg 2 Compute the degree of operating leverage. Degrea of operating leverage Exercise 6-15 Operating Leverage [LO6-1, L06-8] Magic Realm, Inc, has developed a new fantasy board game. The company sold 25 200 games last year at a selling price of $67 per game. Fixed expenses associated with the game total $420,000 per year, and variable expenses are $47 per game Production of the game is entrusted to a printing contractor, 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. 2. Management is confident that the company can sell 32,256 games next year (an increase of 7056 games, or 28%, 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) Complete this question by entering your answers in the tabs below. Req IA Reg 1B Reg 2 Management is confident that the company can sell 32,256 games next year (an increase of 7,056 games, or 28%, 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.) Show less a. Net operating income increases by b. Total expected net operating income
