Magic Realm, Incorporated, has developed a new fantasy board game. The company sold 54,000 games last year at a selling price of $65 per game. Fixed expenses associated with the game total $990,000 per yeac, and variable expenses aro $45 per game. Production of the game is entrusted to a printing contractor. Variable expenses consist mostly of payments to this controctor. Required: 1-a. Prepare a contribution format income statement for the game last yeat. 1-b. Compute the degree of operating leverage. 2. Management is confident thot the company can sell 65,340 games next year (an increase of 11,340 games, or 21%, over last year). Given this assumption: a. What is the expected percentage increase in net operating income for next yoar? a. What is the expected percentage increase in net operating income for next yoar? 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. Prepare a contribution format income statement for the game last yeaf: Magic Realm, incorporated, has developed a new fantasy board game. The company sold 54,000 games last year at a selling price of $65 per game. Fxed expenses associated with the game total $990,000 per year, and variable expenses are $45 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 65,340 games next year (an increase of 11,340 games, or 21%, 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 answec.) Complete this question by entering your answers in the tabs below. Compute the degree of operating leverage. Magic Reslm, Incorporated, has dewoloped a new fantasy board game. The company 5 cld 54,000 games last year at a selling price of Production of the game is entrusted to a printing contractoc Voriable expenses consist mostly of payments to this contracter. Required; 1.a. Prepare a contribution format income statement for the game last ycat. 1.b. Compute the degree of operating leverage. 2. Mansgement is confident that the compary can scll 65,340 games next year (an increase of 11340 games, or 27x, 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 yoar? 1Do not prepare an income statement; use the degree of operating leverage to compute your answer) Complete this questien by entering your answers in the tabs below. Management is confident that the company can sell 65,340 games next year (an increase of 11,340 games, or 2106, aver last year), Given this assumption: beary, What is the expected percentage increase in net cperating incerne for hext year? b. What is the expected ampount of net eperating inceme for next year? (Do not prepare an income statement) use the degree of operating leverage to compute your anwer.)
