All the answers I have entered are correct. I just can not figure out B The foll

Question

All the answers I have entered are correct. I just can not figure out B

The following income statement applies to Nagano Company for the current year: Required Use the contribution margin approach to calculate the magnitude of operating leverage. (Round your answer to 2 decimal places.) b. Use the operating leverage measure computed in Requirement a to determine the amount of net income that Nagano Company will earn if it experiences a 15 percent increase in revenue. The sales price per unit is not affected. (Do not round intermediate calculations.)

Explanation / Answer

operating levarage = contribution margin / net income

7200/ 3000 = 2.4

b)15360*115/100= 17664

less variable cost = 8160

contribution margin=9504

less fixed cost = 4200

net income = 5304

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