Question: Fillmore, Inc. specializes in customized optimization spreadsheet software. The results of the company's operations during the prior year $(20\times$ ?are given in the following table. All units produced during the year were sold. $($Ignore income taxes.$)$

Sales revenue

$6,000,000$

Manufacturing costs:

Fixed

Variable$\mathrm{}$

$1,000,000$

Selling costs:$\mathrm{}$

$2,000,000$

$$

Fixed

Variable$\mathrm{}$

$100,000$

Administrative costs:

Fixed$\mathrm{}$

$200,000$

$$

Variable$\mathrm{}$

$240,000$$60,000$

$$

Prepare a traditional income statement for the company:

Prepare a contribution income statement for the company:

a$)$ ?What is the firm's operating leverage for the sales volume generated during the prior year?

b$)$ ?Using the operating leverage calculated in $(2$a$)$ ?above, and assuming sales revenue increases by $20\%,$ ?what will be the percentage increase in net income? $($Use the degree of operating 

leverage to make this calculation and show your equation$)$

Would an operating manager use a traditional income statement or a contribution income statement to answer requirement $(2)$ ?and why?

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Fillmore, Inc. specializes in customized optimization spreadsheet software. The results of the company's operations during the prior year (20xx) are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue Manufacturing costs: Fixed Variable Selling costs: Fixed Variable Administrative costs: Fixed Variable 1. Prepare a traditional income statement for the company: Prepare a contribution income statement for the company: 2. 3. a) What is the firm's operating leverage for the sales volume generated during the prior year? b) Using the operating leverage calculated in (2a) above, and assuming sales revenue increases by 20%, what will be the percentage increase in net income? (Use the degree of operating leverage to make this calculation and show your equation) Would an operating manager use a traditional income statement or a contribution income statement to answer requirement (2) and why? $ 6,000,000 1,000,000 2,000,000 100,000 200,000 240,000 60,000 Fillmore, Inc. specializes in customized optimization spreadsheet software. The results of the company's operations during the prior year (20xx) are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue Manufacturing costs: Fixed Variable Selling costs: Fixed Variable Administrative costs: Fixed Variable 1. Prepare a traditional income statement for the company: Prepare a contribution income statement for the company: 2. 3. a) What is the firm's operating leverage for the sales volume generated during the prior year? b) Using the operating leverage calculated in (2a) above, and assuming sales revenue increases by 20%, what will be the percentage increase in net income? (Use the degree of operating leverage to make this calculation and show your equation) Would an operating manager use a traditional income statement or a contribution income statement to answer requirement (2) and why? $ 6,000,000 1,000,000 2,000,000 100,000 200,000 240,000 60,000