Following is the income statement for Maloy Mufflers for the month of June 2024: Maloy Mufflers...

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Following is the income statement for Maloy Mufflers for the month of June 2024: Maloy Mufflers Contribution Margin Income Statement Month Ended June 30, 2024 Net Sales Revenue (180 units x $150 per unit) $ Variable Costs (180 units x $100 per unit) Contribution Margin Fixed Costs Operating Income $ 27,000 18,000 9,000 8,500 500 1. Calculate the degree of operating leverage. (Round to four decimal places.) 2. Use the degree of operating leverage calculated in Requirement 1 to estimate the change in operating income if total sales increase by 15% (assuming no change in sales price per unit). (Round interim calculations to four decimal places and final answer to the nearest dollar.) 3. Verify your answer in Requirement 2 by preparing a contribution margin income statement with the total sales increase of 15%. Following is the income statement for Maloy Mufflers for the month of June 2024: Maloy Mufflers Contribution Margin Income Statement Month Ended June 30, 2024 Net Sales Revenue (180 units x $150 per unit) $ Variable Costs (180 units x $100 per unit) Contribution Margin Fixed Costs Operating Income $ 27,000 18,000 9,000 8,500 500 1. Calculate the degree of operating leverage. (Round to four decimal places.) 2. Use the degree of operating leverage calculated in Requirement 1 to estimate the change in operating income if total sales increase by 15% (assuming no change in sales price per unit). (Round interim calculations to four decimal places and final answer to the nearest dollar.) 3. Verify your answer in Requirement 2 by preparing a contribution margin income statement with the total sales increase of 15%.

Answer rating: 100% (QA)

1 Performance rate Donation margin Operating income 9000500 18 2 Increa... View the full answer