3 The following income statement was drawn from the records of Baird Company, a merchandising firm: 3.75 points BAIRD COMPANY Income Statement For the Year Ended December 31, Year 1 Sales revenue (5,000 units * $169) Cost of goods sold (5,000 units * $86) Gross margin Sales commissions (10% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (5,000 units * $1) Net income $ 845,000 (430,000) 415,000 (84,500) (84,000) (37,000) (48,000) (5,000) $ 156,500 eBook Hint Required Print a. Reconstruct the income statement using the contribution margin format. b. Calculate the magnitude of operating leverage. c. Use the measure of operating leverage to determine the amount of net income Baird will earn if sales increase by 10 percent. References Complete this question by entering your answers in the tabs below. Req A Req B and C Reconstruct the income statement using the contribution margin format. BAIRD COMPANY Income Statement For the Year Ended December 31, Year 1 Less: Variable costs 0 Less: Fixed costs $ 0 3 Exercise 2-13A (Algo) Using contribution margin format income statement to measure the magnitude of operating leverage LO 2-3, 2-4 3.75 points The following income statement was drawn from the records of Baird Company, a merchandising firm: eBook 0 BAIRD COMPANY Income Statement For the Year Ended December 31, Year 1 Sales revenue (5,000 units * $169) Cost of goods sold (5,000 units x $86) Gross margin Sales commissions (10% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses (5,000 units * $1) Net income Hint $ 845,000 (430,000) 415,000 (84,500) (84,000) (37,000) (48,000) (5,000) $ 156,500 Print References Required a. Reconstruct the income statement using the contribution margin format. b. Calculate the magnitude of operating leverage. c. Use the measure of operating leverage to determine the amount of net income Baird will earn if sales increase by 10 percent. Complete this question by entering your answers in the tabs below. Reg A Reg B and C Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Baird will earn if sales increase by 10 percent. (Round your intermediate calculations and "Operating leverage" answer to 2 decimal places. Round the "Net income" value to nearest whole dollar.) b. Operating leverage Net income C. 2. Exercise 2-11A (Algo) Mixed cost at different levels of activity LO 2-1 3.75 points Stuart Corporation paid one of its sales representatives $8,500 during the month of March. The rep is paid a base salary plus $11 per unit of product sold. During March, the rep sold 160 units. Required Calculate the total monthly cost of the sales representative's salary for each of the following months: X Answer is not complete. Month April May June July 200 110 210 120 Number of units Total variable cost Total fixed cost $ 2,200 $ 1,210 $ 2,310 $ 1,320 6,000 X Total salary cost $ 8,200 $ 1,210 $ 2,310 $ 1,320