Magic Realm, Inc. has developed a new fantasy board game. The company sold 15,000 games last...
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Magic Realm, Inc. has developed a new fantasy board game. The company sold 15,000 games last year at a selling price of $21 per game. Fixed costs associated with the game total $185,000 per year, and variable costs are $7 per game. Production of the game is entrusted to a printing contractor. Variable costs consist mostly of payments to this contractor. Required: 1-a. Prepare an Income statement for the game last year. Total Per Unit Sales 0 $ $ 0 1-b. Compute the degree of operating leverage. (Round your answer to 2 decimal places.) Degree of operating leverage 2. Management believes that the company's sales will increase by 2,700 games next year. Compute the following: a. The expected percentage Increase in net income for next year. (Do not round intermediate calculations. Round your answers to the nearest whole percentage.) Expected percentage b. The expected total dollar net Income for next year. (Do not prepare an Income statement; use the degree of operating leverage to compute your answer.) (Do not round intermediate calculations.) Total expected net income 0 Magic Realm, Inc. has developed a new fantasy board game. The company sold 15,000 games last year at a selling price of $21 per game. Fixed costs associated with the game total $185,000 per year, and variable costs are $7 per game. Production of the game is entrusted to a printing contractor. Variable costs consist mostly of payments to this contractor. Required: 1-a. Prepare an Income statement for the game last year. Total Per Unit Sales 0 $ $ 0 1-b. Compute the degree of operating leverage. (Round your answer to 2 decimal places.) Degree of operating leverage 2. Management believes that the company's sales will increase by 2,700 games next year. Compute the following: a. The expected percentage Increase in net income for next year. (Do not round intermediate calculations. Round your answers to the nearest whole percentage.) Expected percentage b. The expected total dollar net Income for next year. (Do not prepare an Income statement; use the degree of operating leverage to compute your answer.) (Do not round intermediate calculations.) Total expected net income 0
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Answer rating: 100% (QA)
1a Prepare an Income Statement for the game last year Magic Realm Inc Income Statement for the game ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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