Please answer C & D

Contribution Income Statement and Operating Leverage Florida Berry Basket harvests early-season strawberries for shipment throughout the eastern United States in March. The strawberry farm is maintained by a permanent staff of 10 employees and seasonal workers who pick and pack the strawberries. The strawberries are sold in crates containing 100 individually packaged one-quart containers. Affixed to each one-quart container is the distinctive Florida Berry Basket logo inviting buyers to "Enjoy the berry best strawberries in the world!" The selling price is $90 per crate, variable costs are $70 per crate, and fixed costs are $278,000 per year. In the year 2008, Florida Berry Basket sold 43,000 crates. (a) Prepare a contribution income statement for the year ended December 31, 2008. HINT: Use a negative sign with both "costs" answers.

FLORIDA BERRY BASKET Income Statement For the Year Ended December 31, 2008
Sales	$3870000
Variable costs	$-3010000
Contribution margin	$860000
Fixed costs	$-278000
Net income	$582000

(b) Determine the company's 2008 operating leverage. (Round your answer to two decimal places.) 1.48% (c) Calculate the percentage change in profits if sales decrease by 10 percent. (Round your answer to one decimal place.)

__________% decrease (d) Management is considering the purchase of several berry-picking machines. This will increase annual fixed costs to $378,000 and reduce variable costs to $67.50 per crate. Calculate the effect of this acquisition on operating leverage and explain any change. (Round your answer to two decimal places.)

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