Answer:
Part a
contribution format income statement
Sales $1,643,400
Less Variable Costs ($1,145,400)
Contribution $498,000
Less Fixed Costs ($415,000)
Net Income (Loss) $83,000
Part b
6.00
Part c
See explanation
Part d
See explanation
Explanation:
Contribution Income Statement separates variable costs and fixed costs as shown above.
Degree of operating leverage = Contribution ÷ Earnings Before Interest and Tax
= $498,000 ÷ $83,000
= 6.00
Part c and Part d
Since there is missing information related to these parts here are the explanations.
<u>The expected percentage increase in net operating income for next year.</u>
Calculated by multiplying the percentage change in sales by the degree of operating leverage.
<u>The expected total dollar net operating income for next year.</u>
Simply apply the expected percentage increase calculated in part c to the existing Net Profit