Ehrlich Company produced and sold 45,000 units of a single product last year, with the following results:

Sales Revenue $1,350,000

Manufacturing costs:

Variable 585,000

Fixed 270,000

Selling costs:

Variable 40,500

Fixed 54,000

Administrative costs:

Variable 184,500

Fixed 108,000

A. Prepare a contribution format income statement

B. Calculate the operating leverage

C. Based on your answer in C, calculate the estimated % increase in net operating income if there is a 15% increase in sales.