Compute the degree of operating leverage

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Question - 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.

1. Prepare a contribution format Income statement for the game last year.

2. Compute the degree of operating leverage.

Reference no: EM133116794

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