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Monroe Mufflers Contribution Margin Income Statement Month Ended June 30, 2018 Net Sales Revenue (280 units x $175) $ 49,000 Variable Costs (280 units x
Monroe Mufflers Contribution Margin Income Statement Month Ended June 30, 2018 Net Sales Revenue (280 units x $175) $ 49,000 Variable Costs (280 units x $125) 35,000 Contribution Margin 14,000 Fixed Costs 13,000 1,000 Operating Income $ Requirement 1. Calculate the degree of operating leverage. (Round to four decimal places.) Select the labels and enter the amounts to calculate the degree of operating leverage for Monroe Mufflers. Contribution margin Operating income Degree of operating leverage 1 Requirement 2. Use the degree of operating leverage calculated in Requirement 1 to estimate the change in operating income if total sales increase by 10% (assuming no change in sales price per unit). (Round interim calculations to four decimal places and final answer to the nearest dollar.) The estimated change in operating income will be $ Requirement 3. Verify your answer in Requirement 2 by preparing a contribution margin income statement with the total sales increase of 10%. Monroe Mufflers Contribution Margin Income Statement Month Ended June 30, 2018 Net Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating Income
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