Magic Realm, Incorporated, has developed a new fantasy board game. The company sold 17,400 games last year at a selling price of $64 per game. Fixed expenses associated with the game total $261,000 per yeat, and variable expenses are $44 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this contractor. Required: R-3. 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 22,272 games next year (an increase of 4,872 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 prepore an income statement; use the degree of operating leverage to compute your answee) Complete this question by entering your answers in the tabs below. Prepare a contribution format income statement for the game last year. Magic Realm, Incorporated, has developed a new fantasy board game. The company sold 17,400 games last year at a selling pric $64 per game. Fixed expenses associated with the game total $261,000 per year, and variable expenses are $44 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 22,272 games next year (an increase of 4,872 games, or 28%, over last ye 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. Compute the degree of operating leverage. 1-a. Prepare a contribution format income statement for the game last yeac. 1.b. Compute the degree of operating leverage. 2. Management is confident that the company can sell 22,272 games next year (an increase of 4,872 games, or 28\%, over last yean) 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 sell 22,272 games next year (an increase of 4,872 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.)
