Magic Realm, Inc., has developed a new fantasy board game. The company sold 40,500 games last year at a selling price of $70 per game. Fixed expenses associated with the game total $729,000 per year, and variable expenses are $50 per game. Production of the game ontractor entrusted to a printing contractor. Variable expenses consist mostly of payments to this Required: 1-a. Prepare a contribution format income statement for the game last year. Magic Realm, Inc., Contribution Income Statement Total Per Unit Cost Sales 2,835,000 $ 7C Variable expenses 2,025,000 50 Contribution margin 810,000 20 Fixed expenses 729,000 Net operating income 81.000 1-b. Compute the degree of operating leverage. Degree of operating leverage 10 2. Management is confident that the company can sell 51,030 games next year (an increase of 10,530 games, or 26%, over last year). a. Compute the expected percentage increase in net operating income for next year. Net operating income increases by % b. Compute the expected total dollar net operating income for next year. (Do not prepare an income statement; use the degree of operating leverage to compute your answer.) Total expected net operating income