Piedmont Beverages, Inc. Income Statements for the Years Ended 12/31 2021 2020 (000's omitted) Year 2 % of Sales Year 1 % of Sales % Change Net Sales 240,000 100.00% 210,000 100.00% 14.29% Cost of Goods Sold 137,000 57.08% 104,000 49.52% Gross Margin 103,000 42.92% 106,000 50.48% Other Expenses Selling And Administrative 60,000 54,000 Other Expenses 15,000 12,500 Total Other Expenses 75,000 66,500 Income Before Taxes Income Taxes 7,000 9,875 Net Income Ratios for 2021 (Year 2) - use formulas: Current ratio Quick Ratio (Acid-Test) A/R turnover Average

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 expenses associated with the game total $182,000 per year, and variable expenses are $6 per game. production of the game is entrusted to a printing contractor. 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 58,880 games next year (an increase of 12,880 games, or 28%, over last year). given this assumption: a. what is the expected percentage increase in net operating income for next year? b. 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.)