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ne following income statement applies to Gibson Company for the current year Income Statement Sales revenue (480 units $32) Variable cost (489 units * $17)
ne following income statement applies to Gibson Company for the current year Income Statement Sales revenue (480 units $32) Variable cost (489 units * $17) Contribution margin Fixed cost Net income $15,360 (8,160) 7, 208 (4,200) $ 3, eee Required m. Use the contribution margin approach to calculate the magnitude of operating leverage b. Use the operating leverage measure computed in Requirement a to determine the amount of net income that Gibson Company will earn it experiences a 15 percent increase in revenue. The sales price per unit is not affected. c-1. Verify your answer to Requirement by constructing an income statement based on a 15 percent increase in sales revenue. The sales price is not affected. c-2. Calculate the percentage change in net income for the two income statements. Complete this question by entering your answers in the tabs below. PHILIPS c-2. Calculate the percentage change in net income for the two income statements. Complete this question by entering your answers in the tabs below. Req A and B Req c1 Req C2 Use the contribution margin approach to calculate the magnitude of operating leverage. Afterwards, use the operating leverage measure previously computed for Requirement A to determine the amount of net income that Gibson Company will earn if it experiences a 15 percent increase in revenue. The sales price per unit is not affected. (Do not round intermediate calculations. Round "Operating leverage' to 1 decimal place.) Show less a. Operating leverage b. Net income Req C1 > p ou e wi PHILIPS c-2. Calculate the percentage change in net income for the two income statements. Complete this question by entering your answers in the tabs below. Req A and B Reb c Req c2 Verify your answer to Requirement b by constructing an income statement based on a 15 percent increase in sales revenue. The sales price is not affected. Annual Income Statement Sales revenue Variable cost Contribution margin Fixed cost Net income 9 0a e w PHILIPS U-2. Calculate the percentage change in net income for the two income statements. Complete this question by entering your answers in the tabs below. Req A and B Reqc1 Reg C2 Calculate the percentage change in net income for the two income statements. Change in net income
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