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Magic Realm, Incorporated, developed a new fantasy board game and sold $34,800$ units last year at a selling price of $$68$ per game.

Fixed expenses associated with the game are $$609,000$ per year, and variable expenses are $$48$ per game. Production of the game

was outsourced to a printing contractor, so variable expenses consist mostly of payments to this contractor.

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 $44,544$ games next year $($an increase of $9,744$ games, or $28\%,$ 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 $1$B

Compute the degree of operating leverage.

Degree of operating leverage Magic Realm, Incorporated, developed a new fantasy board game and sold $34,800$ units last year at a selling price of $$68$ per game.

Fixed expenses associated with the game are $$609,000$ per year, and variable expenses are $$48$ per game. Production of the game

was outsourced to a printing contractor, so variable expenses consist mostly of payments to this contractor.

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 $44,544$ games next year $($an increase of $9,744$ games, or $28\%,$ 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.

Management is confident that the company can sell $44,544$ games next year $($an increase of $9,744$ games, or $28\%,$ 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.$)$

a$.$ Net operating income increases by

b$.$ Total expected net operating incomeMagic Realm, Incorporated, developed a new fantasy board game and sold $34,800$ units last year at a selling price of $$68$ per game.

Fixed expenses associated with the game are $$609,000$ per year, and variable expenses are $$48$ per game. Production of the game

was outsourced to a printing contractor, so variable expenses consist mostly of payments to this contractor.

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 $44,544$ games next year $($an increase of $9,744$ games, or $28\%,$ 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 $1$ A

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

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