Magic Realm, Incorporated, developed a new fantasy board game and sold $42,500$ units last year at a selling price of $$63$ per game Fixed expenses associated with the game are $$765,000$ per year, and variable expenses are $$43$ per game Production of the game was outsourced to a printing contractor, so variable expenses consist mostly of payments to this contractor.

Required:

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 $54,825$ games next year $($an increase of $12,325$ games, or $29\%,$ 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.

Management is confident that the company can $5$ ell $54,825$ games next year $($an increase of $12,325$ games, or $29\%,$ 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.$)$

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