Exercise 5-15 (Algo) Operating Leverage [LO5-1, LO5-8] Magic Realm, Inc., has developed a new fantasy board game. The company sold 28,500 games last year at a selling price of $61 per game. Fixed expenses associated with the game total $475,000 per year, and variable expenses are $41 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 35,910 games next year (an increase of 7,410 games, or 26%, over last year). Given this assumption: a. What is the expected percentage increase in net operating income for next year