Techtronics Software, Inc.specializes in customized spreadsheet software.The results of the company's operations during the prior year (20xx) are given in the following table.All units produced during the year were sold.(Ignore income taxes.) Required: 1.Prepare a traditional income statement and a contribution income statement for the company. 2.What is the ﬁrm's operating leverage for the sales volume generated during the prior year? 3.Suppose sales revenue increases by 20 percent.What will be the percentage increase in net income? 4.Which income statement would an operating manager use to answer requirement (3)? Why?

Question

Techtronics Software, Inc.specializes in customized spreadsheet software.The results of the company's operations during the prior year (20xx) are given in the following table.All units produced during the year were sold.(Ignore income taxes.)  Required: 1.Prepare a traditional income statement and a contribution income statement for the company. 2.What is the ﬁrm's operating leverage for the sales volume generated during the prior year? 3.Suppose sales revenue increases by 20 percent.What will be the percentage increase in net income? 4.Which income statement would an operating manager use to answer requirement (3)? Why?

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The Answer of Techtronics Software, Inc.specializes in customized spreadsheet software.The results of the company's operations during the prior year (20xx) are given in the following table.All units produced during the year were sold.(Ignore income taxes.)  Required: 1.Prepare a traditional income statement and a contribution income statement for the company. 2.What is the ﬁrm's operating leverage for the sales volume generated during the prior year? 3.Suppose sales revenue increases by 20 percent.What will be the percentage increase in net income? 4.Which income statement would an operating manager use to answer requirement (3)? Why?