13. Cerling Company produces a variety of chemicals. One division makes reagents for laboratories. The division's projected income statement for the coming year is: $13,080,000 Sales (218,000 units a $60) Total variable cost Contribution margin S 5,450,000 4.250,000 Total fixed cost Net operating income Required: a. The divisional manager has decided to increase the advertising budget by $250,000. This will increase sales revenues by S1 million. By how much will operating income increase or decrease as a result of this action? Suppose sales revenues exceed the estimated amount on the income statement by S1,500,000 Without preparing a new income statement, by how much are profits underestimated? Compute the degree of operating leverage based on the original income statement. If sales revenues are 8 percent greater than expected, what is the percentage increase in operating income b. c