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The The following income statement applies to Nagano Company for the current year: Income Statement Sales revenue (440 units x $36) $15,840 Variable cost (440
The The following income statement applies to Nagano Company for the current year: Income Statement Sales revenue (440 units x $36) $15,840 Variable cost (440 units x $21) (9,240) Contribution margin 6,600 (4,600) Fixed costs 2,000 Net income Required a. Use the contribution margin approach to calculate the magnitude of operating leverage. (Round your answer to 2 decimal places Operating leverage b. Use the operating leverage measure computed in Requirement a to determine the amount of net income that Nagano Company will earn if it experiences a 10 percent increase in revenue. The sales price per unit is not affected. (Do not round intermediate calculations.) Net income
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