ADAMS COMPANY Income Statement For the Year Ended December 31, Year 1 Sales revenue (5,500 units xx$165) Cost of goods sold (5,500 units xx$82) Gross margin Sales commissions ( 10% of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling Net income $907,500 (451,000) 456,500 (90,750) (82,000) (31,000) (48,000) (22,000) $182,750 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 Adams will earn if sales increase by 20 percent. Complete this question by entering your answers in the tabs below. Reconstruct the income statement using the contribution margin