Question 3: Techtronics Software, Inc. specializes in customized 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.) $3,000,000 Sales revenue Manufacturing costs: Fixed Variable Selling costs: Fixed Variable Administrative costs: Fixed Variable Required: 1. 2. 3. 4. 500,000 1,000,000 50,000 100,000 120,000 30,000 I Prepare a traditional income statement and a contribution income statement for the company. What is the firm's operating leverage for the sales volume generated during the prior year? Suppose sales revenue increases by 20 percent. What will be the percentage increase in net income? Which income statement would an operating manager use to answer requirement (3)? Why?

Question 3: Techtronics Software, Inc. specializes in customized 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 Required: 1. Prepare a traditional income statement and a contribution income statement for the company, 2. What is the firm's operating leverage for the sales volume generated during the prior year? 3. Suppose sales revenue increases by 20 percent. What will be the percentage inerease in net income? 4. Which income statement would an operating manager use to answer requirement (3)? Why