Magic Realm, Inc., has developed a new fantasy board game. The company sold $15,000$ games last Management is confident that the company can sell $18,000$ games next year $($an increase of $3,000$ games, or $20\%,$ over last year$).$

a$.$ Compute the expected percentage increase in operating income for next year. $($Do not round intermediate calculations.$)$

Operating income increases by

b$.$ Compute the expected total dollar operating 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 operating incomeyear at a selling price of $$20$ per game. Fixed expense associated with the game total $$182,000$ per year, and variable expense are $$6$ per game. Production of the game is entrusted to a printing contractor. Variable expense consist mostly of payments to this contractor.

Required:

$1-$a$.$ Prepare a contribution format income statement for the game last year.Compute the degree of operating leverage. $($Round your answer to $1$ decimal place.$)$Magic Realm, Inc., has developed a new fantasy board game. The company sold $15,000$ games last year at a selling price of $$20$ per

game. Fixed expense associated with the game total $$182,000$ per year, and variable expense are $$6$ per game. Production of the

game is entrusted to a printing contractor. Variable expense consist mostly of payments to this contractor.

Required:

$1-$a$.$ Prepare a contribution format income statement for the game last year.

$1-$b$.$ Compute the degree of operating leverage. $($Round your answer to $1$ decimal place.$)2.$ Management is confident that the company can sell $18,000$ games next year $($an increase of $3,000$ games, or $20\%,$ over last year$).$

a$.$ Compute the expected percentage increase in operating income for next year.b$.$ Compute the expected total dollar operating income for next year. $($Do not prepare an income statement; use the degree of operating leverage to compute your answer.$)$