Magic Realm, Incorporated, developed a new fantasy board game and sold $25,200$ units last year at a selling price of $$66$ per game. Fixed expenses associated with the game are $$420,000$ per year, and variable expenses are $$46$ 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.

$2.$ Management is confident that the company can sell $30,996$ games next year $($an increase of $5,796$ games, or $23\%,$ over la'st 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 $1A,$Req$1B,$Req$2$

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

$\backslash$table$[[$Magic Realm, Incorporated,,$],[$Contribution Income Statement,,$],[,$Total,Per Unit$],[,,],[,,],[,,],[,,]]$

Rcq$1$A

Req $1$