Exercise 6-15 Operating Leverage [LO6-1, L06-8] Magic Realm, Inc., has developed a new fantasy board game. The company sold 9,500 games last year at a selling price of $69 per game. Fixed expenses associated with the game total $95.000 per year, and vanable expenses are $49 per game. Production of the game is entrusted to a printing contractor Variable expenses consist mostly of payments to this contractor Required: 1. Prepare a contribution format income statement for the game last year 1-5. Compute the degree of operating leverage 2. Management is confident that the company can sell 11.780 games next year fan increase of 2,280 games, or 24%, 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.) reces Complete this question by entering your answers in the tabs below. Reg 1A Reg 13 Reg 2 Prepare a contribution format income statement for the game last year Magic Ream, Inc Contribution Income Statement Total Por Unit TH Next Required: 1-a. Prepare a contribution format income statement for the game last year 1-b. Compute the degree of operating leverage. 2. Management is confident that the company can sell 11,780 games next year (an increase of 2.280 games, or 24%, 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 1A Reg 18 Reg 2 Prepare a contribution format Income statement for the game last year Magle Realm, Inc. Contribution Income Statement Total Per Unit Req 18 Required: 1-a. Prepare a contribution format income statement for the game last year 1b. Compute the degree of operating leverage. 2 Management is confident that the company can sell 11,780 games next year (an increase of 2,280 games, or 24%, 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. Reg 1A Reg 1B Reg 2 Compute the degree of operating leverage. Degree of operating leverage Required: 1-a. Prepare a contribution format income statement for the game last year 1-6. Compute the degree of operating leverage. 2. Management is confident that the company can sell 11780 games next year (an increase of 2280 games, or 24%, 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. Req1A Reg 1B Reg 2 Management is confident that the company can sell 11,780 games next year can increase of 2.280 games, or 24. overlast 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.) Show less #Not operating income increase by Total expected net operating Income