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South C has developed a new premium golf ball. The company sold 10,000 premium golf balls last year at a selling price of $40 per
South C has developed a new premium golf ball. The company sold 10,000 premium golf balls last year at a selling price of $40 per premium golf ball. Fixed costs associated with the premium golf ball total $60,000 per year, and variable costs are $28 per premium golf ball. Production of the premium golf ball is entrusted to a contractor. Variable costs consist mostly of payments to this contractor. a) Prenare a contrihustion marain income statement for last vear b) Compute the degree of operating leverage. Please make sure your final answer(s) are accurate to 1 decimal place. Degree of operating leverage = c) Management is confident that the company can sell 12,000 premium golf balls this year (an increase of 2,000 premium golf balls or 20%, over last year). Compute the expected percentage change in net operating income for this year. Please make sure your final answer(s) are in percentage form and are accurate to 1 decimal place. (For example: 12.3% ) Expected percentage change in net operating income =?% d) Compute the expected net operating income for this year. (Do not prepare an income statement; use the degree of operating leverage to compute your answer.) Expected net operating income for this year =$
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