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The following income statement applies to Perez Company for the current year: Income Statement Sales revenue (380 units x $35) Variable cost (380 units x

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The following income statement applies to Perez Company for the current year: Income Statement Sales revenue (380 units x $35) Variable cost (380 units x $20) Contribution margin Fixed cost Net income $13,300 (7,600) 5,700 (4,500) $ 1,200 Required a. 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 Perez Company will earn if it experiences a 20 percent increase in revenue. The sales price per unit is not affected. c-1. Verify your answer to Requirement b by constructing an income statement based on a 20 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. 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 Perez Company will earn if it experiences a 20 percent increase in revenue. The sales price per unit is not affected. (Do not round intermediate Show more a Operating leverage Net income b. Verify your answer to Requirement b by constructing an income statement based on a 20 percent increase in sales revenue. The sales price is not affected. Annual Income Statement Sales revenue Variable cost Contribution margin 0 Fixed cost Net income $ 0 Calculate the percentage change in net income for the two income statements. Change in net income

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