Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. magic realm, incorporated, developed a new fantasy

Magic Realm, Incorporated, developed a new fantasy board game and sold 46,500 units last year...

90.2K

Verified Solution

Question

Accounting

Magic Realm, Incorporated, developed a new fantasy board game and sold 46,500 units last year at a selling price of $67 per game. Fixed expenses associated with the game are $837,000 per year, and variable expenses are $47 per game. Production of the game was outsourced to a printing contractor, so variable expenses 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.
2. Management is confident that the company can sell 56,265 games next year (an increase of 9,765 games, or 21%, over last year). Given this assumption:
What is the expected percentage increase in net operating income for next year?
What is the expected amount of net operating income for next year? (Do not prepare an income statement; use the degree of operating leverage to compute your answer.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Chemistry
1.2K views

Potassium hydroxide is used to precipitate each of the cations from their respective solution. Determine the...

Mechanical Engineering
1.2K views

What caused the Open Paradigm? Give examples

Biology
1.2K views

Which of the following makes Yeats He Wishes for the Cloths of Heaven classifiec as...

Geometry
1.2K views

1 Tie 2 Graph the function h x 2x 1 6 3 Co 6 4

Calculus
1.2K views

Let 2 15 f a dz 13 2 dz 15 9 2 dz 11 g...

Calculus
1.2K views

9 82 Which of the following equals A 2sin x Select one A D 1...

Accounting
1.2K views

On August 20, Mr. and Mrs. Cleaver decided to buy a property from...

Accounting
1.2K views

The terms "Event" and "Sample Point" are synonyms. Y/N

Accounting
1.2K views

Current Attempt in Progress The objective of general-purpose financial reporting is ...

Accounting
1.2K views

A liability of uncertain timing or amount is referred to as a (an) provisions. account...

Accounting
1.2K views

Outback Outfitters sells recreational equipment. One of the companys products, a small camp stove, sells...

Accounting
1.2K views

W Inc. accepted a three-year noninterest-bearing note for $750,000 on January 1, 2021. The note...