Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion - 3 Exercise 2-13A (Algo) Using contribution margin format income statement to measure the magnitude of operating leverage LO 2-3, 2.4 The following income statement was drawn from the records of Vernon Company, o merchandising firm, 3.75 points VERNON COMPANY Income Statement For the Year Ended December 31, Year 1 Sales revenue (6,500 units * $169) Cost of goods sold (6.500 units * $85) Sales connistons (54 of sales) Administrative salaries expense Advertising expense Depreciation expense Shipping and handling expenses 16,500 units * 14) Net income $1,098,500 (552,500) 546,000 (54.925) (87,000) (33,000) (50,000) (26.000) $ 295,075 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 or net income Vernon will earn if sales increase by 10 percent, Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. HEAVY SACH WILALOM Net income ISIVE $ 295, 075 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 Vernon will earn if sales increase by 10 percent. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg A Req B and C Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Vernon 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 incomo 1.57 318,681 (Reg A