Required:

$1-$a$.$ Prepare a contribution format income statement for the game last year.

$1-$b$.$ Compute the degree of operating leverage.

Management is confident that the company can sell $57,960$ games next year $($an increase of $11,960$ games, or $26\%,$ 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.$)$

Complete this question by entering your answers in the tabs below.

Req $1A$

Prepare a contribution format income statement for the game last year.