Magic Realm, Inc. has developed a new fantasy board game. The company sold 15,000 games last year at a selling price of $21 per game. Fixed costs associated with the game total $182,000 per year, and variable costs are $7 per game. Production of the game is entrusted to a printing contractor. Variable costs consist mostly of payments to this contractor.

Required:

1-a.	Prepare an income statement for the game last year.

1-b.	Compute the degree of operating leverage. (Round your answer to 1 decimal place.)

2.	Management is confident that the company can sell 17,850 games next year (an increase of 2,850 games, or 19%, over last year). Compute the following:

	a.	The expected percentage increase in net income for next year. (Do not round intermediate calculations.)

	b.	The expected total dollar net income for next year. (Do not round intermediate calculations.)