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Exercise 18-25 Degree of operating leverage LO A2 Hudson Co. reports the contribution margin income...

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Accounting

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Exercise 18-25 Degree of operating leverage LO A2 Hudson Co. reports the contribution margin income statement for 2017. HUDSON cO Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (9,000 units at $280 each) Variable costs (9,000 units at $210 each) Contribution margin Fixed costs Pretax income $2,520,000 $ 630,000 504,000 $ 126,000 1. Compute the company's degree of operating leverage for 2017 2. If sales decrease by 5% in 2018, what will be the company's pretax income? 3. Assume sales for 2018 decrease by 5%. Prepare a contribution margin income statement for 2018. Complete this question by entering your answers in the tabs below. Required 1 Required 2Required 3 Compute the company's degree of operating leverage for 2017. (Round your answer to 1 decimal place.) Degree of operating Required 1 Required 2>

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