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Business, 07.10.2019 22:00 andrew412603

The following income statement applies to walton company for the current year: income statement sales revenue (520 units × $42) $ 21,840 variable cost (520 units × $27) (14,040 ) contribution margin 7,800 fixed cost (5,200 ) net income $ 2,600 required a. use the contribution margin approach to calculate the magnitude of operating leverage. b. use the operating leverage measure computed in requirement a to determine the amount of net income that walton company will earn if it experiences a 20 percent increase in revenue. the sales price per unit is not affected. c-1. verify your answer to requirement b by constructing an income statement based on a 20 percent increase in sales revenue. the sales price is not affected. c-2. calculate the percentage change in net income for the two income statements.

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The following income statement applies to walton company for the current year: income statement sal...
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