ee following income statement was drawn from the records of Adams Company, a merchandising firm:

equired

Reconstruct the income statement using the contribution margin format.

Calculate the magnitude of operating leverage.

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.

Req A

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.

Note: Round your intermediate calculations and "Operating leverage" answer to $2$ decimal places. Round the "Net income"

value to nearest whole dollar.