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Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The...

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Hi. I'm stuck on part 3 of the problem on the attached document. Thanks!
Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company’s operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.) Sales revenue $ 2,000,00 0 Manufa cturing costs: Fixed 500,000 Variab le 1,000,00 0 Selling costs: Fixed 50,000 Variab le 100,000 Adminis trative costs: Fixed 120,000 Variab le 30,000 Required: 1-a. Prepare a traditional income statement for the company. (Input all amounts as positive values. Omit the "$" sign in your response.) EUROPA PUBLICATIONS, INC. Income Statement For the Year Ended December 31, 20xx $ Less: $ Less: Operating expenses: $ $ 1-b. Prepare a contribution income statement for the company. (Input all amounts as positive values. Omit the "$" sign in your response.) EUROPA PUBLICATIONS, INC. Income Statement For the Year Ended December 31, 20xx $ Less: Variable expenses: $ $ Less: Fixed expenses:
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$ $ 2. What is the firm’s operating leverage for the sales volume generated during the prior year? (Round your answer to 2 decimal places.) Operating leverage 3. Suppose sales revenue increases by 10 percent. What will be the percentage increase in net income? (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place. Omit the "%" sign in your response.) Percentage increase in net income %
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Europa Publications problem (1).docx

Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing
political and economic issues in Europe. The results of the company’s operations during the...

This question was asked on Jan 13, 2013 and answered on Jan 13, 2013.

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