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Innsbruck Company's October 2022 monthly income statement is given below: Percentage Sales Less: Variable...

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Question

Accounting

Innsbruck Company's October 2022 monthly income statement is given below:
Percentage
Sales
Less: Variable expenses
Contribution margin
Less: Fixed expenses
Net income
Required:
Compute the company's degree of operating leverage.
Degree of operating leverage
Using the degree of operating leverage, estimate the impact on net income of a 10% increase in sales. (Do not round intermediate
calculations.)
Verify your estimate from Requirement (2) by constructing a new income statement for the company assuming a 10% increase in
sales. (Do not round intermediate calculations.)
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