Exercise $11-16$A $($Algo$)$ Assessing the magnitude of operating leverage LO $11-4$

The following income statement applies to Stuart Company for the current year:

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 Stuart 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.

a$.$ Use the contribution margin approach to calculate the magnitude of operating leverage.

b$.$ Afterwards, use the operating leverage measure previously computed for Requirement A to determine the amount of net income that Stuart Company will earn if it experiences a $20$ percent increase in revenue. The sales price per unit is not affected.

Note: Do not round intermediate calculations. Round "Operating leverage" to $2$ decimal places.

a$.$ Operating leverage

b$.$ Net income Exercise $11-16$A $($Algo$)$ Assessing the magnitude of operating leverage LO $11-4$

The following income statement applies to Stuart Company for the current year:

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 Stuart 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.

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. Exercise $11-16$A $($Algo$)$ Assessing the magnitude of operating leverage LO $11-4$

The following income statement applies to Stuart Company for the current year:

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 Stuart 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.

Calculate the percentage change in net income for the two income statements.